As a JROTC Instructor, my pay is based on active duty military pay for my current rank, including Basic Allowance for Housing. Is the BAH taxable?

[MaryK1]

No, BAH and BAS is never taxable income.

[LoriM]

I don't think it's that simple.  I am retired from the army and working as a JTROC instructor.  BAH is not separated out in my paycheck... so my full compensation, including BAH, is listed in box 1 on my W2.  My total compensation is based on an amount that includes BAH, but since I am no longer active duty I am unsure if its taxable.  And if it is not, how do I deduct that?

[MaryK1]

Thank you for waiting, I wanted to check the information,  For the JTROC program, you are actually an employee of the school so a BAH amount is included as part of your pay but it is not excluded as nontaxable benefit.  You do pay taxes on it because it is part of your compensation.

[LoriM]

I think the question arises because 1/2 of our pay comes from the school and the other 1/2 actually comes from the US government (as a reimbursement to the school).  Several instructors I know do exempt BAH from their income.  I just wanted to make sure this was okay before we did.  I think it's safer to pay taxes on the full amount.  thanks for your response.

[MaryK1]

Yes, I agree. I will send an email to a friend jag and see if they have any opinions and/or guidance and I will add if I find anything more

[LoriM]

thank you so much!