Subscribe to receive MyCG updates. Commentary Oct. However, a member who must obligate service for some other reason e. Reenlisting Prior to 6th, 10th, or 14th Year of Active Service. This can include your reenlistment bonus, provided you signed the reenlistment paperwork while you were in the tax-exempt combat zone. This also covers your annual installment bonuses, even if they are later received when you are no longer serving in the tax-exempt combat zone.
However, if you signed the paperwork outside the combat zone, it is not tax-exempt, even if you receive the bonus or annual installment while you are in the combat zone. Example 5. In July, while serving in a combat zone, an enlisted member voluntarily reenlisted. After July, the member neither served in a combat zone nor was hospitalized for wounds incurred in the combat zone.
In February of the following year, the member received a bonus as a result of the July reenlistment. The reenlistment bonus can be excluded from income as combat zone compensation although received outside of the combat zone, since the member completed the necessary action for entitlement to the reenlistment bonus in a month during which the member served in the combat zone.
Example 6. In July, while serving outside a combat zone, an enlisted member voluntarily reenlisted. In February of the following year, the member, while performing services in a combat zone, received a bonus as a result of the July reenlistment. The reenlistment bonus cannot be excluded from income as combat zone compensation although received while serving in the combat zone, since the member completed the necessary action for entitlement to the reenlistment bonus in a month during which the member had neither served in the combat zone nor was hospitalized for wounds incurred while serving in a combat zone.
This tax exemption has another important factor which we cover in the next section about the Thrift Savings Plan. Taking this a step further, tax-exempt TSP contributions are extremely valuable as the income has never been taxed.
This is the part no one wants to read, but it must be understood. If you receive a bonus, you are on the hook for the term of your contract. You may owe a prorated refund to the government if you are unable to fulfill the terms of your contract. This will be based on the amount of money you have received and how much time remains on your contract.
Reasons you might have to repay your bonus can include, but are not limited to: voluntary separation, misconduct, failure to meet standards, failure to meet technical qualifications, cross-training into a new career field before completing the terms of your contract, and possible other reasons.
This may include involuntarily cross-training into a new career field. Be sure to speak with your finance and personnel office for verification.
Note on repaying a bonus due to early separation: Voluntary early separation often requires you to repay a portion of your bonus, but it may depend on why you separate. Repayment of bonuses has been waived at times during Reduction in Force RIF measures, but only in cases when the branch of service specifically waived the requirement.
Be sure to read the contract you signed when you received your bonus, and the contract you will sign to separate early. The terms will spell out whether or not you will need to repay your bonus.
Your finance or personnel office should be able to help you with this. Each branch of service determines which specialties are eligible for enlistment or reenlistment bonuses, and they frequently change as the needs of the service change.
They usually change on an annual basis, but sometimes it may occur more frequently. If you are considering joining the military , then you will need to speak with a recruiter to find out if a bonus is available to you. Make sure you're up-to-date with everything you've earned.
Subscribe to Military. Did you know you can get your pay early? Get the latest on pay updates, benefit changes and award-winning military content.
Right in your inbox. View more newsletters on our Subscriptions page. Check out the US military pay scale charts for all ranks for active duty, as well as Reserve and Guard components.
What will that do to your paycheck? Enter your email for updates. Name Required First Last. Email Required. Related Articles.
0コメント