The IRS has issued Publication 3, Armed Forces’ Tax Guide for use by members of the military. While this guide does not cover every tax provision relevant to military personnel in detail, it addresses many important military-specific tax situations.
Who Is Considered a Member of the U.S. Armed Forces?
According to the IRS, the term “U.S. Armed Forces” includes the following:
- Commissioned Officers
- Warrant Officers
- Listed Personnel in all regular and reserve units (under Secretaries of Defense, Army, Navy, and Air Force)
- Coast Guard
Military Tax Topics Covered in the Armed Forces’ Tax Guide
- Gross income defined – Covered are items that must be included in gross income (active duty pay, reserve training pay, etc.) as well as items that are excluded (such as certain living or moving allowances). Note that any excluded items must still be shown on an individual's tax return.
- Foreign source income – This relates to U.S. citizens with income from sources outside of the country.
- Community property – Included is a discussion of which states enforce community property laws and how to locate additional information on the topic.
- Adjustments to income for Reservists, individual retirement arrangements, and moving expenses
- Combat zone exclusion – Certain pay is excluded from income if earned in a combat zone or hazardous duty area. The guide covers the types of income allowed under the exclusion as well as definitions of combat zones.
- Alien status – A discussion of reporting rules for resident aliens, nonresident aliens, and dual-status individuals.
- Forgiveness of decedent’s tax liability – Specific instructions on how to determine if a tax liability can be forgiven and how to claim that forgiveness or any refund due.
- Deadline extensions – Extensions are granted in certain situations for many tax deadlines, including filing a return and paying income tax. The publication discusses the specific situations and extensions in detail.
Publication 3 also covers other topics, such as itemized deductions and home sales, which pertain to all taxpayers but may be of high interest to military personnel.
Important Consideration: The IRS Needs a Current Mailing Address
Military personnel who are expecting a refund check by mail should ensure the IRS has their current mailing address on file. This is especially important if they are due a federal income tax refund and moved after filing a federal tax return, but before they received the refund check. The IRS offers more than one option for updating a mailing address.
Sources: IRS Website
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