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.

posted

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

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"