Rule changes mean bigger paychecks for thousands of troops
April 30, 2003
Paychecks just got fatter for tens of thousands of troops in and around the Iraqi combat zone.
A slew of newly expanded and — and in most cases retroactive — special pays will provide a hefty war bonus for those directly supporting the war effort, as well as those serving in the Balkans in recent months.
Under previous rules, combat zone special pays and tax exclusion already covered those deployed to Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, United Arab Emirates, Bosnia and Kosovo. Now, two new countries and a big chunk of the Mediterranean Sea have been added to the tax-exclusion club while existing countries will see increases in one or more special pays.
Here’s how it breaks down:
¶ Combat Zone Tax Exclusion: Military personnel in Turkey, Israel and those deployed to water areas of the Eastern Mediterranean that lie east of 30 degrees east longitude are now eligible for combat zone tax exclusion. The effective date for the tax relief is Jan. 1 for Turkey and Israel. For those in the eastern Med, the effective date is April 11.
¶ Hardship Duty Pay: All of Iraq, Israel and Kuwait have been designated Hardship Duty Pay locations effective March 31. Troops in Iraq and Kuwait receive $100 a month, while those in Israel receive $50 a month. Under the old rules, only Jerusalem, Tel Aviv and areas outside Kuwait City were designated HDP locations within those countries.
¶ Imminent Danger Pay: Also known as Hostile Fire Pay, IDP has been bumped up to $225 per month, a $75 increase retroactive to Oct. 1, 2002. The Mediterranean Sea is also now designated an IDP area, joining Turkey, Israel and the vast majority of Middle East and Balkan nations where U.S. troops serve.
¶ Family Separation Allowance: FSA has also been boosted from $100 to $250. The increased monthly stipend enjoyed by most troops on duty in the Middle East and Balkans is also retroactive to Oct. 1.
The new increases have provided for some surprising Leave and Earning Statements for many. Just ask Sgt. 1st Class James Kelley, with the 106th Finance Battalion in Würzburg, Germany, home of the 1st Infantry Division.
“We’ve been getting a lot of questions from soldiers who served in Kosovo,” he said. Troops on a six-month peacekeeping rotation there from April to November 2002, for example, were already getting $150 for Imminent Danger Pay and $100 for Family Separation Allowance.
Those soldiers are now seeing an extra $450 in their paychecks for the two months they were deployed under the new rules. “They think it’s a mistake because they’re not deployed anymore, but the new rules are retroactive so they’re owed two months under the increased pay.”
Meanwhile the new tax exclusion rules are also good news for the thousands of troops serving in Turkey and Israel.
The exclusion covers all pay for enlisted and warrant officers, said Navy Cmdr. Karen Brady, a senior quality of life policy official for U.S. European Command. All other officers, however, must begin paying taxes on any pay over the highest enlisted pay rate. In 2002, that rate was $5,532.90 per month, and in 2003 the rate is $5,882.70 per month, which means it largely only affects lieutenant colonels and above.
Any hostile fire remains tax free regardless of pay scale.
Brady also explained why the Pentagon put different effective dates for the new additions.
“The different effective dates between the Mediterranean, and Turkey and Israel are due to the fact that the eastern Mediterranean was not approved for Imminent Danger Pay until April 11, 2003, and IDP is a prerequisite for combat zone tax relief. Turkey and Israel were already receiving IDP. Since tax relief can be made retroactive, we were able to get a January 1, 2003, effective date whereas policies on IDP do not allow retroactivity,” said Brady in a EUCOM statement.
Officials expect the tax exclusion for Turkey and Israel will end no later than Oct. 1.
Tax relief for dangerous deployment
Tax exclusion covers the following pays: