How do I file my tax return if i need to exclude combat pay?

Question

How do I file my tax return if i need to exclude combat pay?

Answer 1

You file normally, showing all data from your W-2.

Your W-2 separates combat pay from noncombat pay.  It is automatically excluded from income tax.  The amount of combat pay is shown in Box 12 with code Q.

You can choose to include combat pay for purposes of some credits, if it is to your advantage.

Answer 2

It'll be excluded from box 1 of your W-2, so just file as you usually would.  If you are filing for 2007 though, and don't have enough taxable income to be eligible for the stimulus payment, enter the nontaxable combat pay on line 40B if you file form 1040A or 66b of form 1040.