Armed Forces Tax Information

Members of the Armed Forces include enlisted personnel and commissioned officers and reserve units under control of the Secretaries of Defense, Air Force, Navy, Army and Coast Guard. Note that members of the American Red Cross and U.S. Merchants Marines do not qualify for the exclusion.

A member assigned to or deployed to a combat zone receives "combat pay"( also referred to as "imminent danger pay") at the 2012 rate of $7.50 a day instead of the 2011 rate of $225.00 per month.
Being assigned or deployed to a combat zone triggers a tax advantage in some locations. Congress and the President can designat combat zones as "Tax Exempt" areas. Earnings received while in these combats zone are excluded from taxable income. A military member still pays social security taxes and Medicare Tax. Whether or not state tax is excluded is up to the individual state. This exclusion is unlimited for enlisted members and is limited to the maximum enlisted pay amount for officers and warrant officers.>br> In addition to Imminent Danger Pay (Combat Pay), and the tax exclusion, some areas qualify for a special monthly allowance called "Hardship Duty Pay."

A combat zone is identified by the President of the U.S. in an Executive Order. Combat pay earned in a combat zone is not subject to tax. Combat zones are designated by an Executive Order from the President as areas in which the U.S. Armed Forces are engaging or have engaged in combat. There are currently three such combat zones (including the airspace above each): Afghanistan: By Executive Order No. 13239, Afghanistan (and airspace above) is designated a combat zone beginning September 19, 2001. The Kosovo area: By Executive Order No. 13119 and Public Law 106-21, the following locations (including air space) were designated as a combat zone and a qualified hazardous duty area beginning March 24, 1999. Federal Republic of Yugoslavia (Serbia/Montenegro) Albania, The Adriatic Sea ,The Ionian Sea - north of the 39th parallel (including all of the airspace in connection with the Kosovo operation.) Persian Gulf area: By Executive Order No. 12744, the following locations (and airspace) were designated as a combat zone beginning January 17, 1991. The Persian Gulf, The Red Sea, The Gulf of Oman, The part of the Arabian Sea that is north of 10 degrees north latitude and west of 68 degrees east longitude, The Gulf of Aden, The total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates, In addition, the Department of Defense has certified these locations for combat zone tax benefits due to their direct support of military operations, beginning on the listed dates: In support of Operation Enduring Freedom (Afghanistan combat zone): Pakistan, Tajikistan and Jordan - Sept. 19, 2001, Incirlik Air Base, Turkey - Sept. 21, 2001 through Dec. 31, 2005, Kyrgyzstan and Uzbekistan - Oct. 1, 2001, Philippines (only troops with orders referencing Operation Enduring Freedom) - Jan. 9, 2002, Yemen - Apr. 10, 2002, Djibouti - July 1, 2002, Israel - Jan. 1 through July 31, 2003, Somalia - Jan. 1, 2004 In support of Operation Iraqi Freedom (Arabian Peninsula Areas combat zone): Turkey - Jan. 1, 2003 through Dec. 31, 2005, the Mediterranean Sea east of 30? East longitude - Mar. 19 through July 31, 2003, Jordan - Mar. 19, 2003, Egypt - Mar. 19 through Apr. 20, 2003

Yes. The costs of your gold braids, rank insignia, collar devices or altering your uniform are deductible as a miscellaneous itemized deduction subject to the AGI 2% limitation on IRS Schedule A.

Yes. The costs of cleaning your uniform that is in excess of any reimbursement or clothing allowance are deductible. It can be claimed on IRS Schedule A as a miscellaneous itemized deduction subject to the 2% AGI limitation.

Yes. Your Marine reserve training compensation are taxable and reportable on IRS Form 1040 page 1 as wages.

You should use your New York home address to find the applicable IRS center for filing your tax return. Do not use the address of where you are stationed.

Yes. Enlistment and reenlistment bonuses are considered taxable wages for tax purposes.

No. Military disability pensions from the Veterans Administration are not taxable.