Tax Benefits
Tax-Free Military Allowances
BAH, BAS, and most military allowances are excluded from federal income tax.
Who qualifies: Active duty, National Guard.
Most military allowances are not considered taxable income:
• Basic Allowance for Housing (BAH) – not taxed
• Basic Allowance for Subsistence (BAS) – not taxed
• Hostile Fire/Imminent Danger Pay (in combat zones) – not taxed
• Uniform/clothing allowances – not taxed
• Moving expense reimbursements (PCS) – not taxed
Note: Family Separation Allowance (FSA) IS taxable income, except when earned in a designated combat zone. Basic pay and most special pays are also subject to federal income tax unless earned in a combat zone.