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What is combat pay?

 
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2 Replies
RayW7
Expert Alumni

What is combat pay?

Combat pay is income earned while stationed in a designated combat zone in service to the U.S. military. Combat pay is nontaxable for most service members, and all service members can exclude at least some of their combat pay from their taxable income.

 

 

To qualify for combat-related tax benefits, you must be an eligible member who meets one of the following options with service in an area listed further below.

  • Option 1 
    • Service in an active combat area as designated by Executive Order, and…
    • Receive special pay for duty subject to hostile fire or imminent danger as certified by the Department of Defense.
  • Option 2
    • Service in a support area as designated by the Department of Defense in direct sustainment of military operations in the combat zone, and…
    • Receive special pay for duty subject to hostile fire or imminent danger as certified by the Department of Defense.
  • Option 3
    • Service in a statutorily designated Qualified Hazardous Duty Area, and…
    • Receive special pay for duty subject to hostile fire or imminent danger as certified by the Department of Defense.

What is combat pay?

IF you received combat pay, it will be noted in box 12, of a Military/DFAS-issued W-2 with a Code "Q".

 

If the is no Code Q entry in box 12 of that military W-2, with an amount indicated....then you did not receive any combat pay.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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