Do Soldiers Pay Federal Income Tax?

by Steve Brachmann ; Updated July 27, 2017

Soldiers serving with the United States armed forces contribute a vital public service to their country by defending it in combat zones across the world. In return for this service, the government has enacted many programs meant to benefit soldiers after they return home. Soldiers are not completely exempt from paying federal income taxes to the Internal Revenue Service (IRS), but they are eligible for a number of tax credits and other benefits that ease the taxpaying process, especially for soldiers serving on active duty.

Gross Income

Soldiers enlisted with the United States' military are required to pay taxes on their gross income over the previous calendar year each April. The Internal Revenue Service considers a soldier's taxable gross income to include his base pay for active duty as well as special pay for drills, diving duty, foreign duty and student loan repayment and bonus pay for enlistment, reenlistment or any officer ranking. Any pay for life insurance benefits, death allowances, housing, travel and moving expenses is excluded from a soldier's normally taxable gross income.

Tax Credits

Members of the United States' armed forces are eligible for tax credits and other benefits that are not available to members of the public. Any member of the armed reserves who is required to travel 100 or more miles for business related to military service can deduct the travel expenses if he wasn't reimbursed. Soldiers can also deduct expenses incurred during moving, including travel expenses, from their federal income taxes.

Combat Exclusion

Soldiers serving in an area of the world that is designated as a combat zone by the United States are exempt from paying federal taxes on income they earn while stationed in the combat zone. Official combat zones that applied toward this tax exclusion in 2010 were Afghanistan, certain sections of the Balkans and the Persian Gulf region. Even if soldiers serve only part of one month in a combat zone, that entire month's pay is exempt from regular federal taxes.

Filing Taxes and Redeployment

Soldiers who are redeployed home after serving in an active combat zone are granted 180 days from their dates of return to file their federal income taxes with the IRS, regardless of how close to April 15 it is. During this time, soldiers do not incur fines or penalties usually associated with late filing.

If a soldier is deployed before tax day, he is additionally granted the amount of time he would have had to file taxes. For instance, if the soldier is deployed on March 15, he will be granted a total of seven months to file his taxes instead of the usual six.