Taxable Military Income
If you’re in the military, there are are specific rules about what you must report to the IRS as income.
Unless you received payment for service in a combat zone, include these items in your reported gross income:
- Basic pay:
- Active duty
- Attendance at designated service school
- Back wages
- Cost-of-living allowances in the continental United States
- Reserve training
- Training duty
- Special pay:
- Aviation career incentives
- Career sea
- Diving duty
- Foreign duty outside the 48 contiguous states and District of Columbia
- Foreign language proficiency
- Hardship duty
- Hostile fire or imminent danger
- Medical and dental officers
- Nuclear-qualified officers
- Special-duty assignment pay
- Special compensation for assistance with activities of daily living (SCAADL)
- Voluntary separation incentive
- Career status
- Overseas extension
- Incentive pay:
- Hazardous duty
- High altitude/low opening (HALO)
- Other payments:
- Accrued leave
- Personal money allowances paid to high-ranking officers
- Student loan repayment from programs like the Department of Defense Educational Loan Repayment Program — only when the required year’s service isn’t spent in a combat zone
- High-deployment per diem
You also can’t exclude personal use of a government-provided vehicle.
Military taxpayers who receive tax-free combat pay can continue to include it as earned income for purposes of:
- Earned Income Credit (EIC)
- Additional child tax credit
To learn more, see these tax tips:
- Military Income Exclusions
- Combat Zone Exclusions
- Military Moving Expenses
- Military Extensions
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