The combat zone also includes the air above the area. Enlisted service members in combat in the area do not have to pay 1999 federal income tax on their pay for the months they are in the combat zone. DoD officials said any presence in the combat zone qualifies a service member for a tax benefit for the month. For example, the crew aboard a tanker flying over the Adriatic Sea for one mission April 14, would not pay federal taxes for April. Reservists called to active duty receive the same benefit, officials said.
Commissioned officers can exclude a certain amount of pay from taxes.
The amount of exclusion is tied to the highest enlisted salary plus imminent danger pay. Officials said no taxes would be withheld from the pay of enlisted service members who qualify. Taxes will be withheld from officer pay only on the amount not covered by the exclusion. The tax exclusion does not apply to DoD civilians working in the combat zone. Nor does the exclusion apply to support personnel who are not receiving imminent danger pay.