Whether you have a simple or complicated tax situation, it’s worth knowing what tax benefits the IRS provides to members of the military, veterans and their families. These include the following:
- Combat pay is partially or fully tax free. Service members serving in support of a combat zone or in a qualified hazardous duty area also may qualify for this exclusion.
- Qualifying members of the military — those in combat zones or in contingency operations outside the U.S. — may be eligible for tax deadline extensions in which they are given additional time to file and pay taxes. The allowance is at least 180 days from the last day in a qualified zone or operation.
- When calculating their income, members of the armed forces do not have to include assistance programs for dependent care allotments that are contributed by the government.
- Low- and moderate-income service members who receive nontaxable combat pay can use specific qualifications that may increase the amount of the Earned Income Tax Credit they quality for, which means they may owe less tax or get a larger refund.
- Individuals and families may be eligible to deduct unreimbursed relocation expenses if the move was due to a military order and permanent change of station. Additionally, allowances paid for a permanent change of station are not themselves taxable.
See the Military Family Tax Benefits page on IRS.gov for more details on benefits for military members and taxpayers.
Another resource for members of the military, qualifying veterans and family members is MilTax, a free suite of tax services. MilTax is provided by the Department of Defense and includes easy-to-use tax preparation and e-filing software, personalized support from tax consultants, and current information about filing taxes in the military. Many military installations also offer free income tax assistance in person through the military Volunteer Income Tax Assistance program. You can contact your installation’s legal office for details.
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