Federal Employee Combat Zone Tax Parity Act

Subjects: Taxation, Diplomacy, foreign officials, Americans abroad, Government employee pay, benefits, personnel management, Income tax exclusion, Military operations and strategy

Summary:  <p><b>Federal Employee Combat Zone Tax Parity Act</b></p> <p>This bill excludes from gross income, for income tax purposes, the compensation of a federal employee who served in a combat zone or was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone. The bill terminates the exclusion two years after the end of combatant activities in such zone. </p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 227 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 227

To amend the Internal Revenue Code of 1986 to exclude from gross income 
 certain combat zone compensation of civilian employees of the United 
                                States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 9, 2023

 Mr. Wittman introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
 certain combat zone compensation of civilian employees of the United 
                                States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Employee Combat Zone Tax 
Parity Act''.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR CERTAIN COMBAT ZONE 
              COMPENSATION OF CIVILIAN EMPLOYEES OF THE UNITED STATES.

    (a) In General.--Section 112 of the Internal Revenue Code of 1986 
(relating to certain combat zone compensation of members of the Armed 
Forces) is amended by adding at the end the following:
    ``(e) Civilian Employees.--
            ``(1) In general.--Gross income does not include so much of 
        the compensation as does not exceed the maximum amount 
        specified in subsection (b) for active service as an employee 
        of the United States for any month during any part of which 
        such employee--
                    ``(A) served in a combat zone, or
                    ``(B) was hospitalized as a result of wounds, 
                disease, or injury incurred while serving in a combat 
                zone,
        but this paragraph shall not apply for any month beginning more 
        than 2 years after the date of the termination of combatant 
        activities in such zone.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Employee.--The term `employee' has the 
                meaning given such term by section 2105 of title 5, 
                United States Code.
                    ``(B) Active service.--The term `active service' 
                means active Federal service by an employee.''.
    (b) Conforming Amendments.--
            (1) The heading for section 112 of such Code is amended to 
        read as follows:

``SEC. 112. CERTAIN COMBAT ZONE COMPENSATION OF MEMBERS OF THE ARMED 
              FORCES AND CIVILIAN EMPLOYEES OF THE UNITED STATES.''.

            (2) The item relating to section 112 in the table of 
        sections for part III of subchapter B of chapter 1 of such Code 
        is amended to read as follows:

``Sec. 112. Certain combat zone compensation of members of the Armed 
                            Forces and civilian employees of the United 
                            States.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 &lt;all&gt;
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