The Armed Forces Tax Council has summarized key issues
of tax year 2005 for service members and their families.
For example, the council advises victims of hurricanes
Katrina, Rita and Wilma to visit their installation
tax center or the Internal Revenue Service. The council
warns that provisions of the code affecting them are
lengthy and complicated, and can include extensions
for tax filing and help for those who lost homes or
property. In addition, all income earned in 2005 by
enlisted members in a combat zone, such as Iraq,
Afghanistan, Bosnia and Kosovo, is exempt from tax.
Officers’ income is exempt to a limit of $6,529 a
month. And, starting for 2005, members can elect to
include their combat zone income as earned income to
qualify for earned income credit and child tax credit.
Such income will not be taxed. (See more in next item.)
