J.K. Lasser's Your Income Tax 2023, 2nd Edition

CHAPTER 35Members of the Armed Forces

35.1	Taxable Armed Forces Pay and Benefits	651
35.2	Tax Breaks for Armed Forces Members	651
35.3	Deductions for Armed Forces Personnel	653
35.4	Tax‐Free Pay for Service in Combat Zone	653
35.5	Tax Deadlines Extended for Combat Zone or Contingency Operation Service	655
35.6	Tax Forgiveness for Combat Zone or Terrorist or Military Action Deaths	655
35.7	Extension To Pay Your Tax When Entering the Service	656
35.8	Tax Information for Reservists	656

Special tax benefits are provided to Armed Forces personnel. A major tax‐free benefit is the combat pay exclusion. Under this exclusion, members of the Armed Forces, including active duty reservists, may exclude from gross income all compensation for active service received for any month in which they served in a combat zone or were hospitalized as a result of any wound, injury, or disease incurred while serving in a combat zone. Commissioned officers are allowed an exclusion equal to the highest rate of basic pay at the top pay level for enlisted personnel, plus any hostile fire/imminent danger pay received for the month.

Other pay benefits may be tax free, and you may be able to get filing extensions and time extensions for home residence replacements. A list of tax‐free benefits may be found in 35.2. Filing extensions are discussed in 35.5.

Combat zone designations apply to the following locations (and the airspace above, as well as designated “direct support” areas): ...