Tax relief, danger pay eligibility expands

  • Published
  • By Army Sgt. 1st Class Doug Sample
  • American Forces Press Service
Tax relief and special pay for servicemembers involved in Operation Iraqi Freedom have expanded.

On April 11, a Defense Department memo certified that OIF troops stationed in Turkey and Israel and deployed to Mediterranean waters east of 30 degrees east longitude are now eligible for combat zone tax relief.

Also, servicemembers deployed in the same Mediterranean water area now qualify for imminent danger pay.

Effective date for the added combat zone tax relief in Turkey and Israel is retroactive to Jan. 1. Water-deployed eastern Mediterranean troops started their tax relief status April 11, the same date they became eligible for imminent danger pay.

These rules determine entitlement to imminent danger pay:

-- Servicemembers who serve on official duty in one of the designated areas for any part of a month are entitled to imminent danger pay for the entire month.

-- People on duty flying over airspace specifically included in a danger-pay area are eligible even if they do not land there. On the other hand, if the airspace is not designated for the pay, servicemembers are not eligible for it unless they land in the area.

-- Servicemembers who perform duty on a vessel operating in an area designated for that pay are eligible.

The emergency supplemental bill that President George W. Bush signed April 16 raised imminent danger pay to $225 per month, a $75 increase retroactive to Oct. 1.

For tax relief, enlisted members and warrant officers serving in a combat zone for any part of a month exclude all gross income received for military service that month. Amounts excluded from gross income are not subject to federal income tax.

For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received. That means that through September 2002, the most an officer could earn tax free each month was $5,532.90 ($5,382.90, the highest monthly enlisted pay, plus $150 hostile fire or imminent danger pay).

With the start of the increased imminent danger pay Oct. 1, the combat zone tax relief limit was raised to $5,607.90 per month for the rest of 2002. This year, this limit is $5,957.70.

A previous executive order has covered combat zone designations for countries such as Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar and the United Arab Emirates.