Tax Breaks for Military Service Members in 2022

Tax Breaks for Military Service Members in 2022

If you’re a member of one of our military service branches, you could qualify for certain tax breaks that aren’t available to civilians. Let’s look at some ways to lower your tax bill as a military service member.

If someone serves in a combat zone, part or all of their pay is tax-free

Thanks to the combat pay exclusion, combat zone service is tax-free. Plus, if you’re outside the zone but in an area of direct support by Department of Defense standards, you could also get tax-free pay. Commissioned officers have limits with this tax break, but it’s a great one to be aware of.

Base allowance is tax-free, too

That’s right: You don’t have to include base allowance for housing, subsistence, and uniforms in your gross income.

You can also deduct some moving expenses

If you had non-reimbursed moving expenses, they may be tax-deductible. It only counts if you’re on active duty and the move was due to a military order or permanent change of station.

Combat pay can count towards your Earned Income Tax Credit (EIC)

You have the option to include nontaxable combat pay in your taxable income to increase the amount of their earned income tax credit. That could reduce taxes owed or even boost your refund.

Remember also that anyone, not just military members, can use their 2019 earned income to figure their 2021 earned income credit if their 2019 earned income is more than their 2021 earned income.

Reserve and National Guard travel could be deductible, too

If you travel more than 100 miles away from home as part of your service as a member of the reserves, you might be able to deduct your travel expenses.

ROTC allowances? Those could also be tax-free

Some amounts paid to ROTC students in advanced training are not taxable. However, active-duty ROTC pay is taxable. This includes things like pay for summer advanced camp.

Feel good about military tax filing with 1040.com

If you have any questions about how to claim the tax breaks above, get in touch with our support team via Live Chat under the Help menu when you log in, or email us at support@1040.com. We’ll be able to show you where to go to claim these tax breaks on your return.

Whether you’re military or civilian, we can’t wait to show you the 1040.com filing experience. Returning users know that our walkthrough technology is fast, easy, and a steal for the $25 flat rate—but why not try feel-good taxes for yourself? Sign up or log in to get it done!