I. INTRODUCTION

This Technical Information Release (TIR) explains the recently enacted Massachusetts legislation, G.L. c. 62C, s. 81, allowing military and support personnel who served in the Persian Gulf area to extend the time to file 1990 Massachusetts income tax returns and pay 1990 income taxes. The extension of time to file l990 income tax returns and pay l990 income taxes applies to personnel who served as part of Operation Desert Shield or Desert Storm in the Persian Gulf area, which was designated by the President of the United States by Executive Order as a combat zone. The extension period is for the time served in the Persian Gulf area plus at least six months (180 days). The extension provisions are retroactive and apply to personnel who began such service on or after August 2, l990. The new Massachusetts extension provisions parallel the federal provisions of section 7508 of the Internal Revenue Code (Code), as recently amended.[ 1]

II. EXTENSIONS OF TIME TO FILE RETURNS AND TO PAY TAXES

A. General rule. Military and support personnel who served in the Persian Gulf area as part of Operation Desert Shield or Desert Storm on or after August 2, 1990, are allowed an automatic extension of time to file their 1990 Massachusetts income tax returns and to pay their l990 income taxes. The extension is for the period served in the Persian Gulf area, plus at least 180 days. No interest or penalties will be charged during the extension period on taxes due in l990. The extension of time to file returns also applies to spouses of personnel serving in the Persian Gulf area if a joint return is filed. Taxpayers claiming an extension of time to file a return or pay tax under the new provisions of the law should write "DESERT STORM" on the income tax envelope and on the top of the income tax return that they submit to the Department of Revenue.

B. Extension period. The new due date for filing l990 Massachusetts income tax returns and paying tax is the same as the federal date and is calculated as follows:

1. The date of departure from serving in the Persian Gulf area. The starting date is the date of departure from the Persian Gulf area as part of Operation Desert Shield or Desert Storm (or, if applicable, the date of termination of combatant activities in the Persian Gulf area as designated under section ll2 of the Code); plus

2. At least l80 days thereafter. At least l80 days after the starting date in Section II.B.1., above, plus a period of up to l05 additional days, with such additional period representing the number of days remaining in the tax filing period of January l through April l5, l99l, calculated as of the time the taxpayer entered the Persian Gulf area; plus

3. The period of qualified hospitalization, if any. Any period of continuous hospitalization as a result of injuries while serving in the Persian Gulf area, including any period of hospitalization outside the United States; and any period for up to five years of hospitalization within the United States (except this provision does not apply to spouses); plus

4. The period of time in a missing status, if any. Any period during which an individual serving in the Persian Gulf area is missing in action or prisoner of war, within the meaning of s. 6013(f)(3) of the Code.

C. Examples.

Example l. Taxpayer entered the Persian Gulf area on August 26, l990, and served there through March l6, l99l, when she returned to the United States. She has 285 days (l80 plus l05) after her date of departure from the Persian Gulf area (i.e. 285 days from March l6, l99l) to file her l990 income tax return. The additional l05 days are the number of days that were in the tax filing period of January l through April l5, l99l, calculated as of the date she entered the Persian Gulf area. Her l990 return is due by December 26, l99l.

Example 2. Taxpayer entered the Persian Gulf area on January 5, l99l, and was injured on February 15, l99l. He was flown to a U.S. hospital and was hospitalized through April 21, l99l. He has 281 days (l80 plus l0l) after the date of his departure from the hospital on April 21, to file his l990 income tax return. The additional l0l days are the number of days that were left in the tax filing period of January l through April l5, l99l, calculated as of January 5, 1991, the date he entered the Persian Gulf area. (See explanation in II.B.2., above). His l990 return is due by January 27, l992.

III. OTHER TAX RELIEF PROVISIONS

In addition to the extension of time to file tax returns and pay taxes, the new legislation, G.L. c. 62C, § 81, contains other tax relief provisions for military and support personnel who served in the Persian Gulf area during Operation Desert Shield or Desert Storm. For those taxpayers, the Commissioner will suspend all tax return examinations and actions to collect back taxes, without interest or penalties, during the extension period described in this TIR (at II.B., above). These tax relief provisions also apply to spouses of personnel serving in the Persian Gulf area if a joint return is filed. The extension of time to file and other tax relief provisions do not apply to a spouse, however, for any tax year beginning more than two years after the date that combat activities end. Any person claiming eligibility for tax relief under these provisions should write the words "DESERT STORM" on the top of any correspondence to the Department of Revenue.

IV. USE OF POWERS OF ATTORNEY

Taxpayers ordinarily must personally sign their income tax returns, whether filing an individual return or, if married, a joint return. As an alternative, personnel serving in the Persian Gulf area may sign a power of attorney, authorizing a spouse, parent, or other person to act as the taxpayer's personal representative to prepare, sign and file a return on the taxpayer's behalf. To use the alternative method of filing, a signed power of attorney, either in the form of a letter or Form M-2848 (Power of Attorney and Declaration of Representative), must be attached to the return.

V. TAXPAYER ASSISTANCE

Questions on the income tax filing obligations of personnel serving in the Persian Gulf area should be directed to the Massachusetts Department of Revenue, Taxpayer Assistance Bureau, at (617) 727-4545 or toll free at 1-800-392-6089.

/s/Mitchell Adams

Mitchell Adams
Commissioner of Revenue

MA:HMP:mg

TIR 91-3

April 12, 1991




ENDNOTES

1. Under section ll2 of the Code, certain combat pay of military personnel serving in a combat zone is excluded from federal gross income and therefore is not subject to federal income tax. Massachusetts income tax law incorporates the provisions of section ll2 of the Code, so that combat pay will be excluded from Massachusetts income to the extent that it is excluded from federal income. However, since the Persian Gulf area was declared a combat zone in l991, The combat pay exclusion does NOT apply to l990 income. [ return to text]