Military tax guide with benefits like tax-free combat pay, filing extensions, travel deductions, and uniform costs. Get free tax filing help.
Article: 3 minutes
Updated: October 6, 2026 Published: May 11, 2015
By: USAA Reviewed by: Editorial contributors
Military service members and their families have access to tax advantages such as tax-free combat pay, deductions for travel and uniform expenses for reservists and the ability for spouses to retain their state of residency. They can also utilize programs offering free tax preparation and assistance.
As tax time approaches, military members and their families should take time to understand the special advantages the IRS extends to them.
Here are some benefits that could apply to you.
Many service members know about tax-free combat pay. This benefit can save thousands of dollars, and it's already reflected on tax forms. Below is a summary and types of income you can exclude, but you can find the full list at this IRS website Opens in a New Window.
Deployed members also may request extensions for filing tax returns, paying taxes and contributing to IRAs.
But be aware of the potential downside. A delay in filing can also delay a refund if the IRS owes you money. To qualify for the extension, the military member must have been hospitalized as a result of serving in a designated combat zone or meet one of three requirements that the IRS defines Opens in a New Window.
If you qualify for tax-free combat pay, consider spending it with purpose. While you decide on the purpose, safely park it in a savings account. The extra money can be a good way to improve your financial security.
When your Reserve or Guard duties take place more than 100 miles away from home, you may be able to deduct unreimbursed travel expenses. What's more, the cost to purchase and maintain uniforms can be tax-deductible if off-duty wear is prohibited, as is usually the case. Just make sure to factor in any uniform allowance or reimbursement.
Since 2009, military spouses can keep an established state of residency when accompanying a service member who relocates on orders through the Military Spouses Residency Relief Act Opens in a New Window. That means those married to service members don't necessarily pay state income taxes in the state where they've relocated.
Taxpayers selling homes may avoid paying capital gains taxes if they've lived in the home for two of the five years before the sale. Uniformed members may get relief from this rule if orders require them to move, though the details can be complex.
Military members may qualify for an additional 60 months or 10 years, making it a 2-of-15-year rule. It’s a good idea to seek reputable tax counsel for your individual situation.
Free tax assistance is available for military members and some civilians.
You can get tax preparation support and e-filing software that's personalized to military life from Military OneSource and the Department of Defense's MilTax Opens in a New Window. Some active-duty enlisted members and reservists may be able to file both federal and state taxes free online with TurboTax. , This excludes TurboTax Live products.
However, military members aren't the only ones who might receive free tax preparation services like IRS Free File Opens in a New Window. It's available during tax season for tax filers up to certain income limits.
Another program available to both members of the military and civilians is VITA, or the Volunteer Income Tax Assistance Program Opens in a New Window. VITA for military members, which is offered through the Armed Force Tax Council, offers free tax consultation and preparation. Civilians can find more information about VITA on the IRS website Opens in a New Window .
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