Military life comes with particular tax considerations. Deployments, Permanent Change of Station (PCS) moves, military pay and benefits, and living or working across multiple states all affect how you prepare your taxes. If you’re a servicemember, military spouse, or a Veteran, it’s important to stay updated on the tax rules that apply to you, so you can identify potential military tax benefits and avoid filing mistakes.
Your federal taxes are only part of the picture. State tax rules vary based on your legal residence, where you live and work, your military status, and your spouse’s circumstances. Use our military tax guide to review potential tax refund opportunities, understand important rules for military families, and compare your free tax-filing options.
Several military-specific tax provisions could reduce your tax liability or increase your refund, depending on your circumstances. Learn about these opportunities before you file so you don’t overlook a credit, exclusion, or deduction you’re entitled to claim.
The Earned Income Tax Credit (EITC) is a refundable federal tax credit for eligible low- to moderate-income workers and families. The amount you receive depends on factors such as your income, filing status, and number of qualifying children.
Military members who receive nontaxable combat pay can elect to include nontaxable combat pay in earned income when calculating the credit. Depending on your circumstances, including that income could increase or decrease your EITC.
If you received combat pay, compare your EITC both with and without your nontaxable combat pay before making the election. The IRS provides specific guidance on how this election works in Publication 3, Armed Forces’ Tax Guide.
If you serve in an IRS-designated combat zone, certain military compensation you earn during qualifying service is excluded from federal income tax. This generally includes basic pay for qualifying months of service, as well as certain bonuses, hostile fire or imminent danger pay, and other qualifying compensation.
The exclusion applies automatically through military pay reporting. Check your Form W-2 to make sure your nontaxable combat pay is reported correctly. Combat pay remains subject to Social Security and Medicare taxes.
If filing jointly, each spouse may make a separate election for their own combat pay. Your combat pay exclusion also affects other tax calculations. For example, you have the option to include nontaxable combat pay when determining earned income for the EITC.
If you’re an active-duty servicemember who moved because of military orders or a PCS, you may be able to deduct certain unreimbursed moving expenses. Eligible expenses include qualified costs associated with moving household goods and personal effects, storage, and travel to your new home.
The rules are specific. You generally can’t deduct expenses that the government provided or reimbursed, and meals aren’t deductible as a moving expense.
Keep receipts and records for qualified expenses that you paid yourself, along with records of government payments and reimbursements. For more information about military moving expenses and Form 3903, review the IRS guidance before filing.
Military service could give you additional time to file your federal tax return and pay federal taxes.
If you serve in a combat zone or qualify under certain other military provisions, the IRS provides an automatic extension of time to file and pay. For qualifying combat-zone service, the extension generally lasts at least 180 days after the last day you serve in the combat zone, with additional time based on the number of days remaining in the filing period when you entered the combat zone.
You don’t need to request the combat-zone extension in advance. The IRS generally receives information about qualifying service from the Department of War (DoW).
Military families often deal with tax situations that are less common for civilian households. Moving between states, maintaining a legal residence while stationed elsewhere, working in a different state, or owning property in another state can all affect your return.
State residency is one of the most important issues to understand if you’re married to a servicemember.
Under the Military Spouses Residency Relief Act (MSRRA), eligible civilian spouses who relocate with a servicemember under military orders have special options for determining their state of residence for tax purposes. Depending on the circumstances, a spouse could retain a prior legal residence or choose another qualifying state under the applicable rules.
The rules have changed over time, so don’t assume that simply living in a state means you owe state income tax there. Your spouse’s military status, your respective domiciles, where you live, and where you earn income all matter.
If you’re new to military taxes, take time to learn how to distinguish your home of record from your domicile or state of legal residence.
Your home of record generally identifies the place you entered military service from. It’s used for certain military administrative and travel purposes. Your domicile, on the other hand, is the place you intend to return to when you’re absent.
These terms aren’t interchangeable. Your home of record doesn’t automatically determine your state income tax liability.
Your state of legal residence could remain the same while you move from one duty station to another. If you establish a new domicile, however, that change could affect your state tax filing requirements.
If you own a home in one state, live at a duty station in another, and maintain legal residence in a third, your tax situation requires particular attention. Keep documentation showing your legal residence and review the rules for each state involved.
Several free tax-filing and preparation resources are available to servicemembers, Veterans, military spouses, and other eligible taxpayers.
MilTax is a DoW program offered through Military OneSource that provides free tax preparation software and tax assistance designed around military-specific tax situations.
Eligible users receive free federal filing and up to five state returns. MilTax also provides access to tax consultants who understand military pay, deployments, PCS moves, and other military-specific tax issues.
For many servicemembers and military families, MilTax offers a straightforward way to handle a return without paying a commercial tax-preparation provider.
The IRS Volunteer Income Tax Assistance (VITA) program provides free basic tax return preparation to qualifying taxpayers. For the current filing season, VITA generally serves people who make $69,000 or less in income, as well as people with disabilities and taxpayers with limited English proficiency.
Some VITA locations operate on or near military installations, and IRS-certified volunteers receive training to prepare qualifying returns.
Because VITA services vary by location, check with your local site to confirm that it handles your specific tax situation.
Tax Counseling for the Elderly (TCE) provides free tax assistance with a focus on taxpayers age 60 and older. TCE volunteers receive specialized training on retirement and pension-related tax questions.
If you’re a retired servicemember or Veteran aged 60 or older, TCE could be another free resource for preparing your return.
IRS Free File provides free federal tax preparation and filing options for eligible taxpayers. For 2025 federal returns filed in 2026, taxpayers with an adjusted gross income of $89,000 or less generally qualify for at least one Free File option, although individual providers set their own eligibility requirements.
Active-duty military members should also check whether a Free File provider offers a military-specific option that fits their circumstances.
Before choosing a service, compare the eligibility requirements and determine whether your state return is included.
Free tax resources work well for many military families, but you might prefer to hire a professional. If you choose not to use MilTax or a free program, look for a preparer who understands military tax situations rather than assuming every tax professional has experience with military pay.
Before you hire someone, ask:
A preparer who works regularly with military families should be able to explain how these issues may apply to your return. If a preparer can’t answer basic questions about military pay, residency, and multi-state filing, consider using MilTax or another military-focused tax resource instead.
Military taxes don’t have to be overwhelming. Start by reviewing the tax benefits and deductions that apply to your service, then pay particular attention to combat pay, PCS moves, filing extensions, and state residency.