Is Service In Korea Considered A Combat Zone

Photograph by Robert Lingley
21st Space Wing Public Affairs

What is a Combat Zone Tax Exclusion or CZTE? This federal tax break on military machine income is intended for military members assigned to a combat zone. In general, it excludes basic pay (with certain limits) from federal income tax while it is earned in the combat zone. These tax breaks apply to other war machine-related jobs, which we'll explore beneath.

The combat zones are determined by the Commander-in-Chief. They are bailiwick to change depending on mission requirements and other variables. Some gainsay zone designations take expiration dates, while others are open ended.

What follows is not tax advice. This article should be considered a reference for service members and their families to assistance investigate tax options, but the advice of a tax professional person should always be part of whatever decisions made when filing revenue enhancement returns. Tax laws change frequently. Always consult the IRS official site or a revenue enhancement professional person for the current year's guidance.

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How the Gainsay Zone Tax Exclusion Works

The Combat Zone Tax Exclusion is a tax do good which must be applied for when filing the current year'due south taxation returns or when filing amended returns for previous revenue enhancement years. The CTZE has evolved over the years. Some military members who were non considered eligible in past tax years may be eligible now due to reclassification of sure military machine duty equally combat or combat related. We'll explore more than nearly that below.

The IRS maintains a list of "eligible members" organizations which is not limited to branches of the military. Information technology also applies to back up organizations such as the Red Cantankerous and members of other regime agencies that may also be supporting military operations in a combat zone.

For military members, the taxation break is elementary. For enlisted members and warrant officers, there is no limit or cap on the amount of basic pay that is exempt from federal taxation while the wage earner is in the gainsay zone.

For officers, there is a limit. Tax-excluded military machine bones pay is capped at the highest charge per unit of enlisted basic pay plus imminent danger/hostile fire pay. These amounts modify from year to twelvemonth. So, you volition need to check current armed services pay charts to come across what the tax-exempt limit for war machine officers may be in the current tax year.

How The IRS Classifies A Gainsay Zone

The Internal Revenue Service itself does non classify what regions are considered combat zones. That is a chore for the Commander-in-Chief. But the IRS does have a broad definition of what kinds of combat duty may qualify for this federal tax interruption for military income.

According to the IRS official site, the phrase "gainsay zone" includes, but is non express to the post-obit:

• Actual combat areas
• Direct combat support areas
• Qualified hazardous duty areas
• For IRS deadline extensions, the term "gainsay zone" too includes contingency operations areas

How The IRS Classifies "Eligible Members"

At that place is a set of requirements for those who wish to claim military revenue enhancement benefits on their federal income tax forms. The Internal Revenue Service makes a stardom between those who serve in the The states military, those in "support organizations," and those who serve in the "uniformed services" such as National Oceanic and Atmospheric Administration (NOAA) Deputed Officer Corps.

The stardom is for classification purposes. Those who serve in the military or the uniformed services are eligible to claim military tax breaks. The IRS defines armed services service as any of the following and those who have retired or separated from any of these may likewise qualify:

• United States Army (including Ground forces Reserve and Army National Guard)
• United States Navy (including Navy Reserve)
• United States Air Forcefulness (including Air Strength Reserve, Air National Baby-sit)
• United States Marine Corps (including Marine Corps Reserve)
• Us Declension Guard (including Coast Guard Reserve)
• United States Space Force

Uniformed Services of the U.s.a. include:

• The states Public Health Service Commissioned Corps
• National Oceanic and Atmospheric Administration Deputed Officer Corps

Support organizations are defined as those "direct supporting armed services operations." Whatsoever employee working in a gainsay zone or other designated surface area the IRS deems eligible for the taxation intermission may employ for it. These employees include:

• Noncombatant Employees
• Contractors
• Red Cross Members

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IRS Requirements for Challenge Combat Zone Revenue enhancement Exclusions

What follows are the IRS requirements for claiming any combat-related tax exclusions. The bidder must be an eligible fellow member (run into higher up) meeting at least one of the following and who serves in a designated area. These requirements are broken down by the Internal Acquirement Service as options:

• Option Ane: Service in an agile combat area as designated by Executive Guild and authorized to draw special pay for duty "discipline to hostile fire or imminent danger as certified by the Department of Defense."
• Option Ii: Service in a support surface area equally designated by the Department of Defense "in directly sustainment of military operations" in the combat zone and authorized to depict special pay for duty "subject to hostile burn down or imminent danger as certified past the Department of Defense."
• Pick Three: Service in a "statutorily designated Qualified Chancy Duty Area" and authorized for special pay for duty "subject to hostile fire or imminent danger equally certified past the Department of Defense."

Recognized Combat Zones

The post-obit areas have been or are currently designated as combat zones for the purpose of Combat Zone Tax Exclusions. This list is subject field to change due to legislation, declaration of an end to hostilities, Presidential society, or other factors. Always consult a tax professional or the IRS official site to learn what the most current gainsay zones may be. At the time of this writing the following areas are or were considered recognized gainsay zones.

• Sinai Peninsula
• Transitional islamic state of afghanistan Area, including:
  • Jordan, Kyrgyz republic, Pakistan, Tajikistan, and Uzbekistan (every bit of Sept. 19, 2001)
  • Philippines (from Jan. 9, 2002 through Sept. 30, 2015 in support of Operation Enduring Freedom)
  • Djibouti (as of July 1, 2002)
  • Republic of yemen (as of April ten, 2002)
  • Somalia and Syria (every bit of Jan. 1, 2004)
• Kosovo Surface area, including:
  • The Federal Democracy of Yugoslavia (Serbia/Montenegro)
  • Republic of albania
  • Kosovo
  • The Adriatic Sea
  • The Lonian Sea – due north of the 39th parallel
• Arabian Peninsula Area, including:
  • The Persian Gulf
  • The Red Ocean
  • The Gulf of Oman
  • The part of the Arabian Bounding main that is north of 10 degrees northward latitude and west of 68 degrees east longitude
  • The Gulf of Aden
  • The total state areas of Iraq, State of kuwait, Saudi Arabia, Oman Bahrain, Qatar, and the United Arab Emirates

Other gainsay zones including Hashemite kingdom of jordan (as of March 19, 2003) and Lebanon (as of Feb. 12, 2015) "due to their straight support of military operations in the Arabian Peninsula combat zone" according to IRS.gov.

2018 Legislation Gives More Military machine Members Access to Combat Zone Revenue enhancement Exclusions

At one time, war machine members could not claim certain combat-related tax exclusions because they technically did non qualify since their primary residence was listed in the The states. But the 2018 Bipartisan Budget Human activity inverse the "taxation home requirement" allowing armed forces members to claim a "strange earned income exclusion" even if the military member's listed home address is stateside.

The IRS official site says these taxpayers, if eligible, "volition exist able to claim the foreign earned income exclusion on their income tax return for 2018 when they file." This would allow those claiming a gainsay related tax exemption to choose to exclude "their foreign earned income from gross income, upwardly to a sure dollar amount. For tax year 2018, that limit is $103,900" according to a printing release by the Internal Revenue Service.

Thanks to such changes, some military members can file amended tax returns to claim this benefit. This is true for some three thousand troops who served in the Sinai Peninsula combat expanse as far back as 2015.

Taxation reform makes it possible for these troops to claim their combat tax exemptions. In this particular case, the admission to this tax do good was dependent on lawmakers reclassifying the area to include it as an surface area of potential hostile fire.

Strange earned income exclusion, similar nigh tax breaks, is not automatic. Claiming combat zone tax benefits will include filling out additional tax forms such as Form 2555 or Form 2555-EZ attached. For any gainsay-related revenue enhancement exclusion, you should consult the IRS for the proper forms designated or inquire a tax professional for assistance.

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Source: https://militarybenefits.info/combat-zone-tax-exclusion/

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