Tax Tips for Military Members, Veterans, and Their Families

Understanding the tax benefits available to military personnel, veterans, and their families can lead to valuable savings. The IRS offers several provisions tailored specifically to this community:

• Combat pay may be tax-exempt, either fully or partially. This also applies to service in support of a combat zone or a designated hazardous duty area.

• Filing extensions are available to qualifying military members serving in combat zones or contingency operations outside the U.S. These extensions typically last at least 180 days after leaving the qualified area.

• Dependent care assistance provided by the government does not count as taxable income when calculating total earnings for service members.

• The Earned Income Tax Credit (EITC) may be increased for low- and moderate-income service members who receive nontaxable combat pay. For 2024, the EITC can be worth up to $7,830, reducing taxes owed or increasing refunds.

• Relocation-related tax relief is available. Service members may deduct unreimbursed moving costs if the move was required by military orders. Additionally, any allowances received for a permanent change of station (PCS) are not taxable.

For more detailed information, visit the Military Family Tax Benefits section on the IRS website.

Another helpful resource is MilTax, a no-cost program provided by the Department of Defense. It includes:

• Free tax prep and e-filing software tailored for military needs

• Personalized help from tax experts familiar with military-specific situations

• Up-to-date guidance on military tax matters

Many bases also host Volunteer Income Tax Assistance (VITA) programs. Contact your local legal office for more information about on-base tax help.