Combat pay may help military personnel get stimulus payment
March 24th, 2008, 3:58 pm · Post a Comment · posted by Edward Gately
Military personnel serving in combat zones can include non-taxable combat pay on their 2007 or 2008 federal income tax returns if it helps their eligibility for the upcoming economic stimulus payment, according to the Internal Revenue Service.
Those who normally would not file a return because their 2007 income isn’t taxable can file a Form 1040A with the IRS if they want to receive a payment. They should report their non-taxable combat pay on Line 40b of the form to show at least $3,000 in qualifying income. The Department of Defense lists the amount of excluded combat pay, along with the designation “Code Q,” in Box 12 of Form W-2.
If a military person is serving in a combat zone, his or her normal filing requirement is extended until at least 180 days after leaving a combat zone. However, spouses or others with power of attorney can prepare and file a 2007 return on their behalf so that the payment is received this year. To ensure a payment will be received this year, returns must be filed by Oct. 15 to allow sufficient processing time.
