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Article added or updated:
01/06/2008 |
IRS Information for Taxpayers Serving in the Armed
Forces
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FS-2003-11, April 3, 2003
WASHINGTON — The Internal Revenue Service reminds taxpayers serving in
the military to take advantage of all tax exclusions and filing and
payment extensions available to them.
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Exclusions:
Members of the U.S. Armed Forces who serve in a combat zone or qualified
hazardous duty area can exclude certain pay from income. Enlisted
personnel, warrant officers and commissioned warrant officers can
exclude:
* Active duty pay earned in any month served in a combat zone.
* Imminent danger/hostile fire pay and military pay earned while
hospitalized as a result of wounds, disease or injury incurred in the
combat zone.
* A reenlistment bonus if the voluntary extension or reenlistment occurs
in a month served in combat zone.
* Pay for accrued leave earned in any month served in combat zone. (The
Department of Defense must determine that the unused leave was earned
during that period.)
* Pay received for duties as a member of the Armed Forces in clubs,
messes, post and station theaters and other non-appropriated fund
activities earned in a month served in a combat zone.
* Awards received for suggestions, inventions or scientific achievements
because of a submission made in a month in a combat zone.
A commissioned officer (other than a commissioned warrant officer) may
exclude pay according to the rules above, but the amount of the
exclusion is limited to the highest rate of enlisted pay (plus imminent
danger/hostile fire pay received) for each month during any part of
which he or she served in a combat zone. For 2002, this limit was
$5,532.90 and for 2003, it is $5,882.70.
Extensions:
The IRS automatically extends the deadline for filing tax returns,
paying taxes, filing claims for refund and taking other actions related
to federal income tax for U.S. Armed Forces personnel serving in a
combat zone. The IRS also extends the deadline for those in the U.S.
Armed Forces deployed overseas away from their permanent duty station in
support of operations in a qualified hazardous duty area but outside the
qualified hazardous duty area.
The deadline for filing returns, making payments or taking any other
action with the IRS is extended for at least 180 days after:
* The last day of qualifying combat zone service, or
* The last day of any continuous qualified hospitalization for injury
from service in the combat zone.
Combat Zones
A combat zone is any area the President of the United States designates
by Executive Order as an area in which the U.S. Armed Forces are
engaging or have engaged in combat. Usually, an area becomes a combat
zone and ceases to be a combat zone on the dates the President
designates by Executive Order.
The following is a comprehensive list of combat zones:
* The following locations (and airspace above) in the Persian Gulf area
were designated as a combat zone beginning Jan. 17, 1991.The area
includes 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 and the total land areas of
Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar and the United Arab
Emirates.
* Kosovo area, beginning Mar. 24, 1999 — Federal Republic of Yugoslavia
(Serbia and Montenegro), Albania, the Adriatic Sea and the Ionian Sea
north of the 39th Parallel.
* Afghanistan, beginning Sept. 19, 2001.
Public Law 104-117 designates three parts of the former Yugoslavia as a
Qualified Hazardous Duty Area, to be treated as if it were a combat
zone, beginning Nov. 21, 1995 — Bosnia and Herzegovina, Croatia, and
Macedonia.
In addition, the Department of Defense has certified these locations for
combat zone tax benefits due to their direct support of military
operations in the Afghanistan combat zone (Operation Enduring Freedom),
beginning on the listed dates:
*
Pakistan, Tajikistan and Jordan, Sept. 19, 2001
*
Incirlik Air Base, Turkey, Sept. 21, 2001
*
Kyrgyzstan and Uzbekistan, Oct. 1, 2001
*
Philippines, Jan. 9, 2002
*
Yemen, Apr. 10, 2002
*
Djibouti, July 1, 2002
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