Miscellaneous

Yes. The combat zone includes the airspace over it, so you are serving in the combat zone. See Q&A-2 above for a discussion of the amount of your military pay that is excluded.

Yes. Military pay received by enlisted personnel who are hospitalized as a result of injuries sustained while serving in a combat zone is excluded from gross income for the period of hospitalization, subject to the 2-year limitation provided below. Commissioned officers have a similar exclusion, limited to the maximum enlisted pay amount per month. These exclusions from gross income for hospitalized enlisted personnel and commissioned officers end 2 years after the date of termination of the combat zone.

Payment for service outside a designated combat zone is not excluded from income unless the pay is hostile fire/imminent danger pay for serving an area in direct support of military operations in the combat zone. The Department of Defense certifies areas that meet these requirements. Hostile fire/imminent danger pay received for service in a non-certified area is taxable. Generally, hostile fire/imminent danger pay is included on Forms W-2 for persons who do not qualify for the exclusion and not included on Forms W-2 for persons who do qualify for the exclusion.

Your service branch must certify your entitlement on the Form W-2 it provides you. If you believe you are entitled to the exclusion, but it is not reflected on your Form W-2, ask your service branch to issue a corrected Form W-2.

No. Other than military personnel, the only individuals working in a combat zone that are entitled to the deadline extension provisions are those serving in support of the U.S. Armed Forces.

Some employers voluntarily agree to continue paying full wages to their employees who are called to active duty. This is commonly referred to as differential pay. Differential pay is any payment made by an employer to an individual for a period during which the individual is performing service in the uniformed services while on active duty for a period of more than 30 days and represents all or a portion of the wages the individual would have received from the employer if the individual were performing services for the employer.

Military differential pay is wages and should be reported in box 1 of Form W-2 as wages for income tax purposes. Military differential pay is includible as wages for income tax purposes on Form W-2, but is excludable from social security and Medicare taxes (FICA).

These amounts are included in wages on Line 7 of Form 1040.

These amounts are included in wages on Line 7 of Form 1040.