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J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return
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J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

by J.K. Lasser Institute
October 2012
Beginner
784 pages
45h 24m
English
Wiley
Content preview from J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

35.2 Tax-Free Armed Forces Benefits

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image Caution
Withholding on Differential Wages Paid to Workers Joining Military
Employees who enlist or are called up to active military service for over 30 days may receive “differential wages” from their former employer to cover some or all of the difference between their military pay and the wages that were being received prior to joining the military. The differential wages are taxable and cannot be excluded as combat pay (35.4). Income tax must be withheld from the differential wages, but not FICA tax (Social Security and Medicare).
- - - - - - - - - -

The following benefits are not subject to tax:

  • Combat pay (35.4).
  • Living allowances for BAH (Basic Allowance for Housing). You may deduct mortgage interest and real estate taxes on your home even if you pay these expenses with BAH funds.
  • BAS (Basic Allowance for Subsistence) living allowances.
  • Housing and cost-of-living allowances abroad, whether paid by the U.S. Government or by a foreign government.
  • VHA (Variable Housing Allowance).
  • Family allowances for educational expenses for dependents, emergencies, evacuation to a place of safety, and separation.
  • Death allowances for burial services, death gratuity payments to eligible survivors, and travel of dependents to burial site.
  • Dislocation allowance, intended to partially reimburse expenses such as lease forfeitures, temporary ...
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Publisher Resources

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