Publication 4940: Combat Pay Military

Publication 4940, though not a form itself, is an informational resource provided by the Internal Revenue Service (IRS) to explain the tax benefits available to active duty military and reserve personnel. It specifically focuses on the tax exclusion for combat pay received while serving in designated combat zones.

What's the Purpose of Combat Pay Exclusion?

The combat pay exclusion is a tax relief measure designed to recognize the unique challenges and dangers faced by military personnel serving in combat zones. By excluding qualified combat pay from taxable income, the IRS acknowledges the hardships of these service members and reduces their tax burden.

Who Qualifies for the Combat Pay Exclusion?

To qualify for the combat pay exclusion, you must meet the following criteria:

• Be a member of the U.S. Armed Forces (Army, Navy, Marines, Air Force, Coast Guard)
• Serve in a designated combat zone as listed by the IRS (see Publication 3: Armed Forces Tax Guide for current designations)
• Receive special pay for duty subject to hostile fire or imminent danger (certified by the Department of Defense)

Types of Combat Pay Exclusion:

• Enlisted Members and Warrant Officers: All military pay received for any part of a month served in a combat zone is excluded from taxable income.
• Commissioned Officers: The exclusion is capped at the highest enlisted pay for the month, plus any hostile fire or imminent danger pay received.

How Do I Claim the Exclusion?

You don't need a specific form to claim the exclusion. The Department of Defense typically reports your combat zone service to the IRS. However, if you believe you qualify and it's not reflected on your tax return, consult a tax professional or refer to IRS Publication 3, Armed Forces Tax Guide, for more detailed instructions.

What if I Served in Multiple Combat Zones?

The exclusion applies for each month of service in a designated combat zone. You can find resources to calculate your exclusion on the IRS website or consult a tax professional.

Does the Exclusion Apply to State and Local Taxes?

The combat pay exclusion applies to federal income taxes only. State and local tax rules may vary, so check with your state's tax authority for more information.

What Happens if I Already Filed My Return?

If you qualify for the exclusion but didn't claim it on your return, you can file an amended return (Form 1040X) to claim the benefit.

Where can I find more information about the combat pay exclusion and other military tax benefits?

In addition to Publication 4940, several resources can help you understand military tax benefits:

A. Publication 3: Armed Forces Tax Guide (https://www.irs.gov/forms-pubs/about-publication-3)

B. IRS Website – Military (https://www.irs.gov/individuals/military)