More Service Members Eligible for Tax Relief, Danger Pay

An April 11 DoD memo certified that Iraqi Freedom personnel 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, service members 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, 2003. Water-deployed eastern Mediterranean personnel started their tax relief status on April 11, the same date they became eligible for imminent danger pay.

These rules determine entitlement to imminent danger pay:

-- Service members 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.

-- Personnel on duty flying over airspace specifically included in a danger pay area are eligible even if they don't land there. On the other hand, if the airspace isn't designated for the pay, service members aren't eligible for it unless they land in the area.

-- Service members who perform duty on a vessel in operations in an area designated for that pay are eligible.

An added bonus: The emergency supplemental bill that President Bush signed on April 16 raised imminent danger pay to $225 per month, a $75 increase retroactive to Oct. 1, 2002.

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).

Then with the start of the increased imminent danger pay Oct. 1, the combat zone tax relief limit was raised to $5607.90 per month for the rest of calendar year 2002. For January through September, which covers the rest of fiscal 2003 supplemental, this limit goes to $5957.70.

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.