Everyone in the military serving the U.S. Department of Defense could use a tax break. For this reason, we have prepared this article to inform you, our customers/subscribers/readers, of some of the most common military tax benefits available for all active-duty military personnel. Special military pay and other benefits of joining the military, that are seldom talked about, will be presented as well. There are various benefits of going into the military, so it is our job at 108 Solutions to make sure that all service members receive the substantial military compensation available to them. It is our intention to shed light on a few of the ways to get yourself ahead. We have split this article into two separate sections for you to easily comprehend and understand these benefits. The content listed below is the most common Military Pay and Benefits and stay tuned for tomorrows blog post regarding Special Tax Benefits for Military Personnel.
Section I: Military Pay and Benefits
1. Military Pay
Military Pay is the service member’s monthly base pay which is based on their rank and time in service. Logically, a promotion to a higher rank, often called an advancement, will always increase a service member’s pay. In addition, the longer a service member is actively enlisted, the more his/her pay will increase as time in service extends.
2. Housing and Housing Allowances
The Military offers free or subsidized housing to all of its enlisted members - one of the many benefits of the military. Single (unmarried), junior enlistees usually live on-base in the barracks or dormitories. Senior, unmarried enlisted members and single officers usually live off-base and receive a monthly housing allowance. Military personnel who are married, usually live on-base in government family housing, or in on/off-base contact housing. For personnel who choose to live off base, a housing allowance is typically received which is not taxable. This is just one of the many benefits of getting married in the military. Our government definitely does its best to offer benefits to military spouses.
3. Special Pays
Depending on the circumstances of the term, military members can be entitled to “extra” pay. A member may be eligible for some of the following pays depending on rating (MOS) and assignment (location and duty). These payments are subject to income tax, unless earned in a designated combat zone which is a tax free area for military - just another military tax benefit. Some of the most common special pays are:
- Hardship Duty Pay (HDP)
- Hostile Fire Pay/Imminent Danger Pay (HFP/IDP)
- Assignment Incentive Pay (AIP)
- Hazardous Duty Incentive Pay (HDIP)
4. Re-Enlistment Bonuses
Military members who decide to extend their service, can receive an extended amount of re-enlistment bonuses. These types of bonuses depend on the “multiplier” assigned to that job, the member’s current rank, current base pay, time in service, and the number of years the member is re-enlisting for. This pay varies for each branch and can change to meet the needs of the service.
You may be eligible if:
- You have completed at least 17 months of continuous active duty (training not included) but no more than 14 years of active-duty
- You are qualified in a military skill designated as critical by the Secretary of Defense, or by the Secretary of Homeland Security, with respect to the Coast Guard
- You are not currently receiving special nuclear-training pay
- You re-enlist or voluntarily extend your enlistment for a period of at least three years
5. Education Benefits
Military personnel have the ability to begin, continue, or complete a college education after their service term is finalized. Through the Montgomery G.I. Bill, Tuition Assistance programs, Servicemember Opportunity Colleges, and Education on Duty, the U.S Armed Forces offers its members the GI Bill benefit of obtaining a higher education.
6. Miscellaneous Allowances
Military members are entitled to various benefits including medical care, dental care, discount shopping, recreational activities, Space-Available aircraft travel, leave (vacation time), and more. Enlisted military may also be entitled to one or more special allowances depending on circumstances revolving their term. These allowances include the following:
- Food Allowance (BAS)
- Dislocation Allowance
- Family Separation Allowance
- Child Support Allowance
- Clothing Allowance
- Adoption Reimbursement
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