Watching M*A*S*H and the show is about payroll and I was wondering is pay in the military taxed while in combat?

base pay: yes.  allowances (housing, sustinence, uniform, ect) no.


there are also some special tax status things for guys in combat zones

If you arent in a combat zone - absofuckinlutely.

While in theaters of operation (AOR now), for even one day out of the month, the pay for that entire month is tax free.  This is why so many people used to re-enlist when over in the desert, to avoid the 28% tax on their selective reenlistment bonus.

In the context of what you're asking, I doubt their pay would have been taxed, but then I don't know when that became a law.

Quoted: base pay: yes.  allowances (housing, sustinence, uniform, ect) no. there are also some special tax status things for guys in combat zones

Yep. That's it.

I think it is incredibly stupid that they pay people, then pay other people to take a portion of the first guys money away from him, then pay more people to take some off the top of the second groups pay....

WTF do they tax SS and federal wages? It's fucking stupid.

Quoted: I think it is incredibly stupid that they pay people, then pay other people to take a portion of the first guys money away from him, then pay more people to take some off the top of the second groups pay.... WTF do they tax SS and federal wages? It's fucking stupid.

Simple answer, because they can.

I know several people that re-enlisted while over in the middle east. As an example they got their full $20,000 instead of getting maybe 14k after taxes here.

When I got a $8,000 bonus four years ago I think I actually ended up with $5,000 after it was all said and done, but I got most of withholding "back" in tax refunds. The military is in a lower tax bracket so you should be getting most of that bonus money back in your tax return anyway especially if you have a child and can claim head of household and all that fun stuff, I did. It all kind of evens out in the end.

As far as active duty stateside, base pay is taxed like regular income, but all of the housing and substinence allowances are not. If you work the tax system right you could possibly be getting back a refund that is MORE than you had withheld from your base pay in some cases.  

The term is "Combat Zone Tax Exclusion", or CZTE for short.  Your Social Security and Medicare will continue to be deducted, as they aren't technically a "tax".

Also, any leave that is earned while in a CZTE area is also tax free.  That means that when you decide to take that trip to the Bahamas after you get back from the sandbox, while you are on leave your pay during that time will not be taxed.  This type of leave is known as "combat leave".

Here is the kicker:  If you spend any portion of a month in a CZTE area, then the ENTIRE month is tax free.  My C-130 touched down in Iraq five minutes prior to midnight on the last day of the month.  I RAN LIKE HELL to the receiving duty officer (or whatever he called himself), and ensured that he marked me down at 2358.  Whew...

Another thing, the same thing applies when you return home.  It was obvious that our flight back home was deliberately delayed so that we would leave the first day of the month (which meant that we got that entire month tax free, for only having been in a CZTE for a day.

It gets better:  Since we already had that month tax free upon our arrival back in the states, few people wanted to take leave.  That is because your combat leave balance is used before your regular leave balance.  If we wait until the month after we get back to take leave, then we are able to not double dip, but TRIPLE dip our tax benefit (because the pay accrued while on combat leave is not taxed.

This concludes today's lesson.

Some states (Illinois for one) don't tax ANY income made while on active duty, it's completely exempt, regardless of your location/activities.

Quoted: Some states (Illinois for one) don't tax ANY income made while on active duty, it's completely exempt, regardless of your location/activities.

I am a PA resident.  My state does not tax military pay earned outside of the state of PA.  I do pay state taxex on my investment income.  If I were to be stationed inside PA, I would pay state taxes on my military pay.

I'm not familiar with the combat zone exclusion, but it's taxed on a Federal level, but the pay is so low they dont usually have to pay any taxes and in fact get a EIC.  And if you claim Texas or Florida or another state that doesnt have a state income tax you can avoid taxes there too.  Got a brother in law in the Army

Yes we pay taxes..  On base pay.  BAH is tax free and IDP/HFP doesn't mean you are in a tax exclusionary zone.  Example.  Valkyrie flew a mission to South America(opsec-as specific as I can be) although I got IDP/HFP it was not tax exclusionary for the month..

I paid taxes on only half my pay last year as I was deployed pretty much the rest of the time..

Its been common practice in the Navy for units in the Med to cross into the tax-free AOR on the 31st of the month, and exit on the first of the following month.  Then you get two months of tax free income and bonuses.  If  a unit deploys without entering a tax-free zone, reenlistments go WAY down.  

How can income - derived compeltely from tax dollars - be taxed? Why are we paying people to enforce a tax on taxes? Why not just figure out what they get now after taxes, make that their pay, and elimate the "tax"?

We elect some really fucking stupid people, you know that?

Quoted: How can income - derived compeltely from tax dollars - be taxed? Why are we paying people to enforce a tax on taxes? Why not just figure out what they get now after taxes, make that their pay, and elimate the "tax"? We elect some really fucking stupid people, you know that?

it's a matter of the left hand not knowing what the right hand is doing

Quoted: Its been common practice in the Navy for units in the Med to cross into the tax-free AOR on the 31st of the month, and exit on the first of the following month.  Then you get two months of tax free income and bonuses.  If  a unit deploys without entering a tax-free zone, reenlistments go WAY down.

We sometimes schedule missions to RON for just that purpose.  And as stated above, it's rediculous to tax our pay as its actually tax revenue to begin with..

Quoted: How can income - derived compeltely from tax dollars - be taxed? Why are we paying people to enforce a tax on taxes? Why not just figure out what they get now after taxes, make that their pay, and elimate the "tax"? We elect some really fucking stupid people, you know that?

That's the whole idea behind payroll witholding for FICA, Social Insecurity, Fed income tax, state income tax withholding