Military Taxes Explained

This episode explains how taxes work for military members and families. It covers which types of military pay and allowances are taxable, combat-zone tax exemptions, state tax rules based on legal residence, and free tax-filing resources available to eligible members of the military community.

Learn more at: https://blog.ahrn.com/military-taxes/.

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Welcome to the AHRN Minute. My name is Jenny Nielsen, and today we’re talking about military taxes.

Military pay doesn’t always follow the same tax rules as civilian income. Base pay is subject to federal income tax, but certain allowances, including Basic Allowance for Housing, or BAH, and Basic Allowance for Subsistence, or BAS, are generally tax-free.

Pay earned during a designated combat zone can also be exempt from federal income tax. Enlisted members and warrant officers can exclude all of their combat-zone pay, while commissioned officers have a limit.

State taxes can be a little bit more complicated. Your state tax situation generally depends on your legal residence, not simply where you’re stationed. And nine states currently don’t tax military pay at all.

And when it’s time to file, programs like VITA and MilTax offer free tax assistance for eligible members of the military community.

That’s your AHRN Minute, and thanks for listening!