Soldiers in Combat Get Special Tax Rules

WASHINGTON -- Soldiers in combat, too busy or too far from home to file their taxes, get special exceptions at tax time. The assistance includes flexible filing deadlines, tax-free combat pay and delayed audits, The Associated Press reported Wednesday.

Pay earned in combat zones is tax-free to most military personnel, a benefit available to a husband and wife if they both served in combat. Soldiers can qualify if they served in designated combat zones, which currently include regions in the Arabian Peninsula, Afghanistan and Kosovo.

The untaxed pay can now help soldiers who qualify for the child tax credit or the earned income tax credit, a benefit designed to help low-income military families escape poverty. A new law lets soldiers include their tax-free combat pay in the calculation, if it helps generate a bigger credit.

For more info, go to http://www.irs.gov/pub/irs-pdf/p3.pdf (Adobe Acrobat required).

-- NYSSCPA.org News Staff

Posted on 2/24/05