Quick Answer: What Is Combat Pay On Tax Return?

What is a non taxable combat pay?

Combat pay is income earned while stationed in a designated combat zone in service to the U.S.

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Combat pay is nontaxable for most service members, and all service members can exclude at least some of their combat pay from their taxable income..

How much will I make on deployment?

The most common extra pays and allowances during deployment include: Family Separation Allowance starts after 30 days: $8.33 per day, up to $250 per month. Hardship Duty Pay for location or mission: $50, $100, or $150 per month.

Is Kuwait a tax free combat zone?

Designated Combat Zones The Red Sea. The Gulf of Aden. The Gulf of Oman. The total land areas of Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

How much do you get for combat pay?

As of 2018, a military member assigned to or deployed to a combat zone receives bonus combat pay (officially called “hostile fire” or “imminent danger pay”), at a rate of $225 per month.

What qualifies as a combat zone?

The term “combat zone(s)” is a general term used on IRS.gov and includes all of the following hostile areas where military may serve: actual combat areas, direct combat support areas, and qualified hazardous duty areas.

Do I have to claim combat pay on my taxes?

Combat Pay You do not have to report nontaxable pay you receive as a member of the Armed Forces as earned income for purposes of the EITC. Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS).

Where is combat pay on tax?

Your nontaxable combat pay is listed on Form W-2, box 12, 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.

What line is combat pay on 1040?

Line 50Combat pay or special combat pay. Only enter the amount that was taxable and included in your adjusted gross income. Don’t include untaxed combat pay. Parents, be sure to report Education Credits that may appear on the tax return (1040: Line 50) & (1040A: line 33).

How does combat pay affect taxes?

Generally, any form of military pay earned while on deployment in a combat zone is excluded from federal income tax. … Any form of pay earned while on deployment in a combat zone is excluded from federal income tax.

How does combat pay work?

Combat pay is a tax-exempt monthly stipend paid to all members of the Armed Services who are serving in designated hazardous zones. It is paid in addition to the person’s basic pay. … Any person enrolled in a branch of the U.S. military who is assigned to a designated hazardous area is eligible to receive combat pay.

Does everyone pay combat?

Enlisted persons and warrant officers—Combat pay is nontaxable, and you should report zero for combat pay or special combat pay. Commissioned officers—Combat pay in excess of the highest enlisted person’s pay (plus imminent danger/hostile fire pay) is taxable.

How is combat pay reported on the w2?

The combat pay is not taxable, but it’s shown on your husband’s W-2, here in box 12, with Code Q. I will enter that into the system with the rest of the W-2 information because combat pay can increase some tax credits.