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President Clinton signed the executive order April 13 declaring the area around Yugoslavia a combat zone. This gives U.S. service members serving in Operation Allied Force some tax breaks.
The executive order details the combat zone as the Federal Republic of Yugoslavia (Serbia and Kosovo), Albania, the Adriatic Sea and the Ionian Sea (above the 39th parallel). The effective date for the combat zone is March 24. The combat zone also includes the air above the area.
The designation also gives qualified service members imminent danger pay of $150 per month.
Enlisted service members in combat in the area do not have to pay 1999 federal income tax on their pay for the months they are in the combat zone. DoD officials said any presence in the combat zone qualifies a service member for a tax benefit for the month. For example, the crew aboard a tanker flying over the Adriatic Sea for one mission April 14, would not pay federal taxes for April. Reservists called to active duty receive the same benefit, officials said.
Commissioned officers can exclude a certain amount of pay from taxes. The amount of exclusion is tied to the highest enlisted salary plus imminent danger pay. Thus, officers must pay taxes on any pay in excess of $4,653 per month (highest enlisted pay $4,503 plus $150).
Officials said no taxes would be withheld from the pay of enlisted service members who qualify. Taxes will be withheld from officer pay only on the amount not covered by the exclusion.
The tax exclusion does not apply to DoD civilians working in the combat zone. Nor does the exclusion apply to support personnel who are not receiving imminent danger pay. So, for example, an airman loading ordnance aboard an F-16 in Aviano does not qualify for the tax exclusion. A B-52 bomber crew flying missions out of RAF Fairford, U.K., would. So, the typical service member supporting Allied Force from Italy and Germany would not receive this tax benefit.
Sailors aboard ships in the Adriatic or Ionian seas will receive the tax benefit and imminent danger pay.
The second benefit is an extension for filing their 1998 federal income tax returns. Under existing law service members and DoD civilians serving outside the United States on April 15 have an automatic two month extension for filing their income tax returns. But those service members and DoD civilians serving in or supporting units in the combat zone will get an additional extension of as much as 180 days from when they leave the area or the combat zone designation ends.
Service members with questions should contact their local military personnel offices, unit tax advisers or installation finance offices.
Story by Jim Garamone, American Forces Press Service
| Date Taken: | 04.16.1999 |
| Date Posted: | 07.04.2025 00:15 |
| Story ID: | 528427 |
| Location: | WASHINGTON, US |
| Web Views: | 1 |
| Downloads: | 0 |
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