Wilmington, DE (PRWEB) November 20, 2012

If you receive tax-free combat pay, you can include it as earned income:

When determining the Earned Income Credit (EIC)
When determining the additional child tax credit
For purposes of making an IRA contribution
Other Excludable Income

Even if you received the income as a reimbursement or an allowance, you dont include this income in your gross income:

Living Allowances

Basic Allowance for Housing However, you can deduct mortgage interest and real-estate taxes on your home even if you pay these expenses with your basic allowance for housing.

Basic allowance for subsistence

Housing and cost-of-living allowances abroad, whether paid by the U.S. government or by a foreign government

Overseas Housing Allowance

Family Allowances

Certain educational expenses for dependents
Emergencies
Evacuation to a place of safety
Separation

Death Allowances

Burial services
Death gratuity payments to eligible survivors
Travel of dependents to burial site
Moving Allowances

Dislocation

Move-in housing
Moving household and personal items
Moving trailers or mobile homes
Storage
Temporary lodging and temporary lodging expenses
Military base realignment and closure benefit

For the military base realignment and closure benefit, the excludable amount can