This TIR explains the Massachusetts personal income tax consequences of Executive Order No. 13239, issued by President George W. Bush on December 12, 2001, declaring Afghanistan, including its airspace, as a combat zone. September 19, 2001 is designated as the date of the commencement of combatant activities in the zone. The term "combat zone" is defined in the Internal Revenue Code (Code) to mean "any area which the President of the United States by Executive Order designates, for purposes of this section." I.R.C. § 112.

(1) Filing Requirements. Federal income tax filing deadlines are extended for individuals serving in a combat zone, or hospitalized as a result of such service, during the period designated as the period of combatant activities. Members of the armed forces, as well as individuals serving in support of the armed forces, serving in a combat zone as defined in Code § 112, have an additional 180 days, in addition to the period of service or a hospitalization attributable to such service, in which to meet Code deadlines, including filing income tax returns and paying income tax. I.R.C. § 7508.

Massachusetts also grants an extension of time to file income tax returns and pay taxes due for those serving in a combat zone. Similar to Code § 7508, the Commonwealth extends the income tax filing and payment deadlines for 180 days, in addition to the period of service or a hospitalization attributable to such service, to members of the armed forces and individuals serving in support of the armed forces who are serving in a combat zone during the designated period. G.L. c. 62C § 81.

(2) Compensation Excluded from Gross Income. Under Code § 112, compensation received for active service in a combat zone by members of the armed forces of the United States is not included in gross income. Income earned for active service for any month during which a member below the grade of commissioned officer served or was hospitalized as a result of injuries received during service in a combat zone is excluded from gross income (I.R.C. § 112(a)); a portion of such income earned by commissioned officers is also excluded (I.R.C. § 112(b)).

Massachusetts gross income is based on federal gross income (G.L. 62 § 2(a)); Massachusetts adopts the Internal Revenue Code as of January 1, 1998. G.L. c. 62 § 1(c). Since Code § 112 was enacted before that date, Massachusetts excludes from income, to the same extent as under the Code, compensation earned by members of the armed forces for service in a combat zone.


/s/Sheila T. LeBlanc
Sheila T. LeBlanc
Senior Deputy Commissioner of Revenue

STL:DMS:rmh

Febuary 22, 2002
TIR 02-4