This Technical Information Release (TIR) provides guidance on filing and payment extensions for the 2002 tax year for military and support personnel who have served or are serving in the Persian Gulf area as part of Operation Iraqi Freedom. Under G.L. c. 62C, § 81, military and support personnel who served or are serving in a "combat zone" are allowed an extension of time to file Massachusetts income tax returns and pay Massachusetts income taxes. The extension period is for the time served in the Persian Gulf area plus at least six months (180 days). The Massachusetts extension provisions parallel the federal provisions of section 7508 of the Internal Revenue Code (Code).[ 1]
The Persian Gulf area was designated a combat zone by former President of the United States, George H.W. Bush, in Executive Order No. 12744, issued on January 17, 1991. The locations included within the scope of the Executive Order were Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, the United Arab Emirates, the Persian Gulf, the Red Sea, the Gulf of Oman, the Gulf of Aden and parts of the Arabian Sea. The Executive Order was never rescinded and the area continues to be classified as a combat zone.
II. EXTENSIONS OF TIME TO FILE RETURNS AND TO PAY TAXES
A. General rule. Military and support personnel who are serving or have served in the Persian Gulf area as part of Operation Iraqi Freedom are allowed an automatic extension of time to file their 2002 Massachusetts income tax returns and to pay their 2002 income taxes. The extension is allowed for any days during the filing period in which the taxpayer 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 for 2002. 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 this provision of law should write "COMBAT ZONE" on the income tax envelope and on the top of the income tax return that they submit to the Department of Revenue. If filing electronically, taxpayers should write "COMBAT ZONE" next to their name, or if necessary, on one of the address lines on the form, along with the date of deployment.
If the Department takes any actions covered by these provisions or sends a taxpayer a Notice of Assessment of tax for the 2002 taxable year, before learning that he or she is entitled to an extension of the deadline, the taxpayer should contact the Department at one of the numbers listed in section V. No penalties or interest will be imposed for failure to file a return or pay taxes during the extension period.
B. Extension period. The new due date for filing 2002 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 Iraqi Freedom (or, if applicable, the date of termination of combatant activities in the Persian Gulf area as designated under section 112 of the Code); plus
2. At least 180 days thereafter. At least 180 days after the starting date in section II.B.1., above, plus a period of up to 105 additional days, with such additional period representing the number of days remaining in the tax filing period of January 1 through April 15, 2003, calculated as of the time the taxpayer entered the Persian Gulf area during the filing season; 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 a prisoner of war, within the meaning of section 6013(f)(3) of the Code.
Example 1. Taxpayer entered the Persian Gulf area on February 1, 2003, and served there through May 28, 2003, when she returned to the United States. She has 254 days (180 plus 74) after her date of departure from the Persian Gulf area ( i.e., 254 days from May 28, 2003) to file her 2002 income tax return and to pay her taxes. The additional 74 days are the number of days that were left in the tax filing period of January l through April 15, 2003, when the taxpayer entered the combat zone in the Persian Gulf area on February 1, 2003. Her 2002 return is due by February 6, 2004.
Example 2. Taxpayer entered the Persian Gulf area on January 5, 2003, and was injured on February 15, 2003. He was flown to a U.S. hospital and was hospitalized through April 21, 2003. He has 281 days (180 plus 101) after the date of his departure from the hospital on April 21, to file his 2002 income tax return and to pay his taxes. The additional 101 days are the number of days that were left in the tax filing period of January 1 through April 15, 2003, calculated as of January 5, 2003, the date he entered the Persian Gulf area. (See explanation in II.B.2., above). His 2002 return is due by January 25, 2004.
III. OTHER TAX RELIEF PROVISIONS
In addition to the extension of time to file tax returns and pay taxes, G.L. c. 62C, § 81 contains other tax relief provisions for military and support personnel who are serving or have served in the Persian Gulf area during Operation Iraqi Freedom. 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 "COMBAT ZONE" 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, Customer Service Bureau, at (617) 887-MDOR (6367) or toll free in MA at (800) 392-6089.
1. Under section 112 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 112 of the Code, so that combat pay will be excluded from Massachusetts income to the extent that it is excluded from federal income. [ return to text]
Commissioner of Revenue
April 4, 2003