Tax filing resources for U.S. service members
Wednesday, March 08, 2023
In addition to their duties as members of the armed forces, U.S. service members also have to answer to the Internal Revenue Service.
When it comes to those taxes, many military men and women must deal with situations vastly different from civilian taxpayers. They also get some special tax considerations.
Here are some resources to help members of the military community navigate their sometimes complex tax situations.
Official IRS guide: The IRS' Armed Forces' Tax Guide is a good place to start. The 39-page PDF document, officially known as IRS Publication 3, covers the such things special rules for military personnel serving abroad, filing deadline extensions, unreimbursed moving expenses (a tax benefit now available only to service members), and reserve component travel expenses
Who qualifies: Service members also should check out IRS.gov's page on who is eligible for military tax benefits. More than just men and women on active duty in the six U.S. armed forces — Army, Navy, Air Force, Marine Corps, Coast Guard, and Space Force — and their reserve units qualify.
Combat zone considerations: There is no way to make serving in a dangerous military region less stressful, but at least the tax code takes such circumstances into consideration. There are specific tax rules that apply to those who serve in combat zones.
Combat pay, for example, could be tax-free for eligible combat zone taxpayers. A special IRS online site has more on the tax exclusion for combat service.
Combat pay also could affect military personnel's eligibility for and amount of the Earned Income Tax Credit (EITC).
If you or your spouse got nontaxable pay as a member of the Armed Forces, you don't have to include it as earned income on your federal taxes. But if you and your spouse do opt to count your nontaxable combat pay as earned income for EITC purposes, you may owe less tax and get a larger refund. The IRS' online EITC Assistant can help you calculate your taxes both ways to determine which method works best for you.
Contractors or employees of contractors supporting the U.S. Armed Forces in designated combat zones, also may qualify for the foreign earned income exclusion.
The IRS has a special web page listing the current IRS recognized combat zones. You also can check out Questions and Answers on more Combat Zones provisions.
Free tax prep and filing assistance: One other tax situation members of the military share with civilians is the need for help in preparing and filing their taxes.
MilTax, a Department of Defense program, is a suite of tax services that provide free preparation software and electronic filing for federal tax returns, and up to three state income tax returns. It's designed to address the realities of military life, including deployments, combat and training pay, housing and rentals, and multistate filings.
Those eligible for MilTax include members of the Air Force, Army, Navy, Marines, and National Guard. Coast Guard members serving under Title 10 authority are entitled to this resource as well. Retired and honorably discharged service members are authorized to use the program for up to 180 days after their separation.
Many military installations offer free income tax assistance in-person through the military Volunteer Income Tax Assistance program. Military service members can contact their installation's legal office for details. Veterans may also qualify for free tax help at several locations nationwide if they meet income or age requirements.
Military personnel who do not qualify for MilTax should look into the regular IRS Free File program. It's available to taxpayers, military as well as civilians, who made $73,000 or less in 2022. This year, most of the participating Free File providers offer options that take military service into account.
Military filers who are stationed overseas or who make more than the income threshold still can prepare their taxes and file at no cost by using the program's Free Fillable Forms. Check out these fillable forms tips for international taxpayers.
Veterans tax help, too: Finally, service personnel who are no longer on active duty can find information at the IRS web page for veterans. The tax agency has worked community and government partners to provide veterans information on tax credits and benefits, free tax preparation, financial education, and asset-building opportunities available to veterans.
You also might find these items of interest:
- Tax tips for members of the U.S. military
- How to help veterans beyond holiday commemorations
- Texas border troops could face surprise tax bills due to underwithholding error
- VITA & TCE volunteers are back, helping taxpayers prepare & file returns for free
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