Question

I don't understand when my combat zone tax exclusions will come back to me because I already paid those taxes on my monthly pay checks when I was deployed.

Forum|Forum|6 years ago
June 1, 2019
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OK ... the income was already excluded on the W-2 box 1 so you are not being taxed on that income at all. Now they should not have withheld taxes on the non taxable income however if they did then they are included in the box 2 (fed) and box 17(state) withholdings ... so when you complete the return the excess withholding is refunded naturally.

J

jaim-coddingtonAuthor

Thanks for your response, makes sense I'm just asking because my refund seems normal or even lower than average and does not seem to be accounting for 3 months' worth of non-taxed combat zone pay. It seems like the overall refund should be significantly higher. It's not clear how the exclusion was accounted for, my tax return just shows my post-exclusion income and the exclusion amount.