topic Re: Should I include combat pay? in Tax help for military filers

Should I include combat pay?

mellimolina — Mon, 09 Mar 2026 09:18:27 GMT

military combat zone pay

Re: Should I include combat pay?

ThomasM125 — Wed, 02 Mar 2022 18:57:32 GMT

I'm not sure what you are asking exactly. Combat pay is not taxable, but that will be reflected on your W-2 form. So, all you need to do is enter W-2 form in TurboTax and the program will determine the correct way to report your combat pay on your tax return.

Re: Should I include combat pay?

mellimolina — Wed, 02 Mar 2022 19:14:45 GMT

Hi... the EITC (Earned Income Tax CrediT) is asking if I want to include it? It sound like it is giving the option to increase or decrease the refund.

Re: Should I include combat pay?

MayaD — Wed, 02 Mar 2022 19:34:05 GMT

The Working Families Tax Relief Act of 2004 and the Gulf Opportunity Zone Act of 2005 give military personnel the option of treating combat pay as earned income for purposes of the EIC.

If you and your spouse do choose to include your nontaxable pay as earned income for the EITC, you may owe less tax and get a larger refund. If you choose to include your combat pay, you must include all of it.

Re: Should I include combat pay?

mellimolina — Wed, 02 Mar 2022 19:38:13 GMT

Thanks for your answer. I just want to make sure if including it or not on the EICT is optional. I know it will be reported on the w2 but I was not sure for the EICT if thos amount has to be there or not.

Re: Should I include combat pay?

ThomasM125 — Wed, 02 Mar 2022 19:49:20 GMT

You have a choice to include all or none of your combat pay to qualify for the earned income tax credit.

Re: Should I include combat pay?

mellimolina — Wed, 02 Mar 2022 20:02:55 GMT

Thank you all for your answers.

Re: Should I include combat pay?

Daxxramas — Mon, 23 Jan 2023 22:45:47 GMT

Other than adjusting the refund amount, what else changes when including or excluding my combat pay?

I am basically looking for what the "down side" is to not including my combat pay and getting the larger refund.

Thanks in advance.

Re: Should I include combat pay?

ZhuoliA — Tue, 24 Jan 2023 17:23:43 GMT

There is no "downside" related to the election of treating combat pay as earned income for the purpose of the earned income tax credit (EITC). This election is specific to EITC only. TurboTax can help you with this election. You can still exclude the combat income from the gross income even though you elect to treat combat pay as earned income for the purpose of EITC. The exclusion from gross income is automatic because of the code Q in box 12 of the W-2.

Please see IRS Publication 3 for more details.

@Daxxramas