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States Won't Tax Military Members Serving in Combat Zones

National Guard Bureau

WASHINGTON, June 4, 1999 – All states and territories will follow the federal government's lead and not tax service members serving in the designated combat zones.

President Clinton's April 13 executive order details the newest combat zone as the Federal Republic of Yugoslavia (Serbia, including Kosovo), Albania, the Adriatic Sea and the Ionian Sea above the 39th parallel. The effective date is March 24, the day Operation Allied Force began. Those in the combat zone also receive imminent danger pay of $150 per month.

Other active combat zones for tax purposes are Bosnia- Herzogovina and the Persian Gulf region.

Enlisted service members do not have to pay 1999 federal income tax on their pay for the months they are in the combat zone. DoD officials said members earn a tax exemption for the entire month for any presence in the combat zone, no matter how slight.

Commissioned officers can exclude an amount equal to the highest enlisted salary plus imminent danger pay. Thus, any pay in excess of $4,653 per month (the highest enlisted pay $4,503 plus $150) is subject to income tax.

Service members with federal and state income tax questions should contact their legal assistance offices.

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