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What is considered 'Federally Taxable Combat Pay'? The question in tubro tax asked me to exclude the 'Q' portion on my W2 (non taxable combat pay).

I have read that 'Hazard Pay' may be taxable but I wanted to make sure.
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What is considered 'Federally Taxable Combat Pay'? The question in tubro tax asked me to exclude the 'Q' portion on my W2 (non taxable combat pay).

If you are an eligible military member who served in a combat zone, your income is not taxed.  However, you can use it as an income source in order to receive the Earned Income Tax Credit. 

 

A combat zone is an area where U.S. armed forces are engaging in or have engaged in combat AND the area must be designated as a combat zone by a presidential executive order.

Nontaxable combat pay will usually be shown on your W-2, Box 12 with code Q.

 

See: Combat Zones Approved for Tax Benefits

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