Combat pay

If you are an eligible member who served in a combat zone, the IRS can exclude your income from taxation. If you spend a single qualifying day in the combat zone, your pay for the entire month is excluded from taxable income, and you receive $2in combat pay for that month. A combat controller, deployed with a U. Army Special Forces team in Afghanistan, searches for targets to provide close air support during an engagement with insurgents. Your nontaxable combat pay is listed on Form W- box 1 with code Q. But you and your spouse can each choose to count your nontaxable combat pay as earned income to qualify for the Earned Income Tax Credit. If it does, you will need to get a corrected Form W-from your finance office.

Find to pay questions from articles, pay charts and more. Many militaries offer combat pay to their members, recognizing the increased hazard of working in a combat zone, and combat pay often receives special treatment on tax returns. What does combat pay mean?

How much is combat pay in the military? Is combat pay tax free? Tax free additional compensation paid to members of the armed forces who are on active duty in a designated combat zone or hazardous duty area. This pay includes: active duty pay , dislocation allowances, reenlistment bonuses, achievement awards, pay for accrued leave and other miscellaneous types of compensation that are paid as a. You cannot exclude as combat pay any wages shown in box of Form W-2.

To enter nontaxable combat pay for Form W- Box 12: From within your TaxAct return (Online or Desktop) click the. Hardship Duty Pay (HDP) Assignment Incentive Pay (AIP) Hazardous Duty Incentive Pay (HDIP) There are more than special and incentive pays. The following is a list of those authorized by law. Visit your military finance office to find out if your service has implemented a specific special pay or incentive and whether you are eligible to.

Service in an active combat area as designated by Executive Order, and… Receive special pay for duty subject to hostile fire or imminent danger as certified by the Department of Defense. Hazardous Duty Pay : Monthly additional pay for certain hazardous duty assignments, such as the flight deck operations personnel on an aircraft carrier. Other examples are parachuting and scuba diving. Although any base pay earned by a member of the armed services while serving in a combat zone is excluded from federal income tax, it is still subject to Social Security tax and Medicare tax.

For enlisted service members, the amount of the exclusion from federal income tax is unlimited. Nontaxable combat pay will usually be shown on your W- Box with code Q. If you served in a combat zone for one or more days in a particular month, you’re allowed the above exclusions for that entire month. Do not report untaxed combat pay , which would be reported on your W-2.

Combat pay tax exclusion. Links provided to applicable chapters of DoD Financial Management Regulation. The amount paid is $2per month for all ranks. English dictionary definition of combat pay. It is available to reservists as well as those who served on active duty in the military.

Soldiers who serve in a combat zone can exclude certain pay from their taxable income. If you are a commissioned officer (other than a commissioned warrant officer), there is a limit to the amount of combat pay you can exclude. President designates by Executive Order.

Hostilities or Imminent Danger Pay.