Were you in the American military and called Iraq or Afghanistan home for a few months in 2009? How about Djibouti or Kosovo?
Those places, and others that include Jordan, Turkey, Bahrain and Kyrgyzstan, are officially identified as combat zones by the U.S. government.
Recognizing the inherent danger in serving in such places, American military forces are given a tax break for their service. Those who qualify can receive a $120 credit for every month they serve in a combat zone. They qualify if they spent even one day of the month there.
In Minnesota, the state’s Department of Revenue has estimated that more than 2,300 members of the military may qualify for the break for time served in 2009 but have yet to make a claim that could mean hundreds of dollars. The deadline for claiming the credit for service in 2009 is Oct. 15, 2013.
There are exceptions, but generally speaking, members of the military should remember that any income earned for services performed while in a combat zone is considered to be combat pay and is therefore not taxable and is not considered earned income.
To receive the credit, members of the military must file Form M99, Credit for Military Service in a Combat Zone, and attach corresponding Form DD-214. If they are still on active duty, they may attach Leave and Earnings statements for each month of qualifying service.
You must have been a Minnesota resident during the time of service to qualify. For more information on the military tax credit and to fill out the form, visit the Department of Revenue’s website at www.revenue.state.mn.us.
Tax credits for service in a combat zone are also available for 2010, 2011 and 2012. For more information, visit the Members of the Military page on the Department of Revenue’s website and sign up for e-mail updates on military credits, application deadlines and tax law changes. For information on locations that qualify for the tax credit, visit the IRS website at www.irs.gov.