If you’re serving in the military and receive non-taxable combat pay, you may want to report it on your tax form anyway, to ensure you will receive a tax rebate as part of the economic stimulus plan.
To get the rebate you have to have earned at least $3,000 last year and your combat pay may get you to that point, even if it is not taxable.
The U.S. Internal Revenue Service issued guidance today saying to report this combat pay on line 40b of form 1040A.
To figure out how much combat pay you’ve received look at Box 12 of your W-2. It should also have a Code Q there, according to the IRS.
If you’re out of the country you can have someone file taxes on your behalf with a power of attorney.
March 20, 2008