Peggy Riley (IRS Media Relations Office)
Steve Daige, IRS Compliance Area Manager and Alan LeBovidge, Massachusetts Commissioner of Revenue announced today a number of federal and state income tax provisions for Massachusetts taxpayers serving in "Operation Iraqi Freedom."
"At this important time, our dedicated military personnel in combat zones should not be worried about tax issues, " said Daige. "Both the IRS and Massachusetts Department of Revenue want each of them to receive all of the tax benefits that they are entitled to. We want all of the servicemen and servicewoman - and their families - to know that we are here to help."
Generally, enlistees up to warrant officers (including commissioned warrant officers) exclude all their military pay received for military service in a combat zone. For commissioned officers, the monthly exclusion is capped at the highest enlisted pay, plus any hostile fire or imminent danger pay received. For 2002, this limit was $5,532.90 and for 2003, it is $5,882.70. Amounts excluded from gross income are not subject to federal or state income tax.
"We intend to do everything possible to make it is easy for our military personnel to file their Massachusetts income tax forms,'' LeBovidge said. "Once they return home, the Revenue Department will be ready to work with them."
Both the IRS and the Massachusetts DOR automatically extend the deadline for filing tax returns, paying taxes, filing claims for refunds and taking other actions related to federal and state income tax for U.S. Armed Forces personnel serving in a combat zone. The IRS and DOR also extend the deadline for those in the U.S. Armed Forces deployed overseas away from their permanent duty station in support of operations in a qualified hazardous duty area but who are outside that area.
The deadline for filing returns, making payments or taking any other action with the IRS or DOR is extended for at least 180 days after:
- The last day of qualifying combat zone service, or
- The last day of any continuous qualified hospitalization for injury from the combat zone.
To qualify for State tax benefits, military personnel or their authorized representative must contact the Mass DOR directly by calling (617) 887-MDOR or toll-free in Massachusetts at 1-800-392-6089.
The IRS is working with the military to obtain information about reservists and regular military personnel serving in combat areas. During this interim period, people in the military, their spouses or their authorized representatives have several options to claim the filing extensions or filing exclusions:
- When filing returns, mark "Combat Zone" at the top of the form along with the date of deployment,
- Contact the IRS through the special e-mail address at IRS.gov or the Massachusetts DOR through an email address at mass.gov/dor. Correspondence should include the name, date of birth, and date of deployment of the service member. (No Social Security numbers should be included in the e-mail.) The IRS emphasized only military-related e-mails should go to this address. Calls can also be made to the IRS help line at 1-800-829-1040 or the Massachusetts DOR help line at (617) 887-MDOR or toll-free in Massachusetts at 1-800-392-6089.
These two steps also apply if a federal or state notice inadvertently goes to an individual serving in a combat zone or his or her spouse. The notice can be deferred by following the e-mail steps or by sending the notice back to the IRS or Massachusetts DOR marked with the words "Combat Zone" and the date of deployment.
The IRS has created a new section on its Web site containing important tax benefit information for members of the U.S. Armed Forces serving in a combat zone. The new information is available on the front page of IRS.gov by clicking on "Armed Forces Tax Benefits." The new web section includes:
- Questions and answers on exclusions, extensions and other tax benefits available to members of the Armed Forces serving in a combat zone.
- IRS, Publication 3, Armed Forces' Tax Guide, which covers the special tax situations of active members of the U.S. Armed Forces.
- A special e-mail address for members of the U.S. Armed Forces, their spouses, authorized agents or representatives, which can be used to notify the IRS about someone serving in a combat zone. Details are available at www.irs.gov.
State income tax information is available on the Massachusetts DOR Web site at :mass.gov/dor. The IRS plans to take additional steps and provide additional guidance on issues involving military personnel and combat zones. This new information will also be posted to the Armed Forces page of IRS.gov.