- MilTax is the Department of Defense’s free tax software for active-duty service members, eligible family members, survivors, and veterans within 365 days of separation — with no income limit.
- Enlisted active-duty and reserve members (E-1 through E-9) can also file federal and state taxes for free through TurboTax’s military discount program.
- Veterans and retirees who no longer qualify for MilTax can use VITA, AARP Tax-Aide, or IRS Free File (income limit: $89,000 AGI for 2025).
- Key military tax benefits include tax-free BAH, BAS, combat pay exclusion, PCS moving expense deductions, and favorable Earned Income Tax Credit rules.
- The 2025 federal tax filing deadline is April 15, 2026 — though combat zone deployments trigger automatic extensions.
Table of Contents
- MilTax: The DoD’s Free Tax Service
- TurboTax Military Discount
- VITA: Free In-Person Help on Base
- Options for Veterans and Retirees
- IRS Free File
- Military Tax Benefits Worth Knowing
- Combat Zone and Deployment Tax Rules
- State Income Tax Considerations
- Documents to Gather Before Filing
- Frequently Asked Questions
Taxes are complicated enough without navigating the unique wrinkles that come with military life — combat pay exclusions, multi-state moves, BAH and BAS treatment, and filing from overseas. The good news is that service members, veterans, and their families have access to some of the best free tax resources available to any group of Americans. This guide breaks down every legitimate option for tax year 2025 (filed in 2026), who qualifies for each, and the military-specific tax benefits you shouldn’t leave on the table.
This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Department of Defense, the VA, or any government agency. For official tax guidance, visit IRS Publication 3: Armed Forces’ Tax Guide or contact a MilTax consultant.
MilTax: The DoD’s Free Tax Service
MilTax, offered through Military OneSource, is the flagship free tax resource for the military community. It includes tax preparation and e-filing software built specifically around military life, plus access to tax consultants who understand the nuances of military pay, deployments, and multistate filings. Both the software and the one-on-one consultations are completely free.
MilTax software is typically available from mid-January through mid-October each year. It’s powered by an industry-leading tax provider and is 100% accuracy-guaranteed. Eligibility is verified through DEERS (Defense Enrollment Eligibility Reporting System).
Who Qualifies for MilTax
- Active-duty service members (all branches)
- National Guard and Reserve members on active duty orders
- Eligible family members and dependents of active-duty service members
- Survivors of active-duty service members
- Veterans and retirees within 365 days of their separation or retirement date
There is no income limit for MilTax — which sets it apart from most other free filing programs. You can file a federal return and up to five state returns at no cost.
How to Access MilTax
Go to Military OneSource and log in or create an account. You’ll verify eligibility through DEERS each time you access the software until your return is complete. If you need personal help, MilTax consultants are available by phone at 800-342-9647 or via secure live chat on the Military OneSource website. In-person support is also available at Volunteer Income Tax Assistance (VITA) offices on many installations.
TurboTax Military Discount
TurboTax offers free federal and state tax filing to enlisted active-duty and reserve members (E-1 through E-9) in honor of their service. This discount applies to 2025 tax returns filed through TurboTax’s Online products.
Note that this offer is specifically for enlisted personnel — commissioned officers, warrant officers, veterans who have separated for more than a year, retirees, and National Guard members not on active duty orders do not qualify for the free TurboTax filing. Always confirm current eligibility terms directly with TurboTax before filing, as promotional details can change year to year.
VITA: Free In-Person Help on Base
The Volunteer Income Tax Assistance (VITA) program, sponsored by the IRS, is available on most larger military installations worldwide. VITA is staffed by IRS-certified volunteers who receive special training in military-specific tax situations — including combat pay, PCS moves, SCRA residency rules, and overseas filing scenarios.
VITA is free and available to service members, their families, and individuals who generally earn $67,000 or less. It’s a particularly good option if you prefer sitting down with someone face-to-face, have a complicated return, or have questions that go beyond what software can easily handle. To find the nearest VITA location, visit the IRS VITA locator or ask at your installation’s finance office.
Options for Veterans and Retirees
Veterans who separated more than 365 days ago and military retirees don’t qualify for MilTax, but several strong free options remain available.
AARP Tax-Aide
AARP Tax-Aide provides free tax preparation help to low- and moderate-income taxpayers, with particular focus on those age 50 and older. You don’t have to be an AARP member to receive assistance. This is a strong option for older veterans and retirees who prefer in-person support.
Legal Assistance / JAG Offices
Military retirees with access to installation services can often receive free tax advice through Judge Advocate General (JAG) legal assistance offices. Availability varies by installation, so call ahead to confirm what’s offered and whether you need an appointment.
IRS Free File
Veterans with an adjusted gross income (AGI) under $89,000 in 2025 can use IRS Free File to prepare and e-file a federal return at no cost. Free File is a partnership between the IRS and commercial tax software companies. Use the IRS’s online lookup tool to find a provider that fits your situation.
IRS Free File for the Broader Military Community
Beyond MilTax, military members who may not qualify for DoD programs — or who simply prefer commercial software — can use IRS Free File if their 2025 AGI was $89,000 or less. This covers the vast majority of junior and mid-grade service members. Free File options include guided software from name-brand providers and fillable forms for those comfortable preparing their own returns.
Military Tax Benefits Worth Knowing
The IRS treats certain military pay and allowances differently than civilian income. Understanding these rules can make a meaningful difference in your refund — or your tax bill.
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Tax-Free Allowances
Several common forms of military compensation are excluded from federal taxable income entirely:
- Basic Allowance for Housing (BAH) — excluded from gross income under IRC Section 134. This applies even to the supplemental “Warrior Dividend” BAH payment of $1,776 distributed to eligible service members in December 2025, which the IRS confirmed is non-taxable.
- Basic Allowance for Subsistence (BAS) — excluded from taxable income.
- Overseas Cost of Living Allowances (COLA) — excluded from taxable income.
- Combat zone pay — pay earned while serving in a DoD-designated combat zone is generally excluded from federal taxable income. See IRS Publication 3 for the full list of designated zones.
PCS Moving Expense Deduction
The Tax Cuts and Jobs Act eliminated moving expense deductions for most Americans — but active-duty service members are a notable exception. If you moved due to a Permanent Change of Station (PCS) order, you may be able to deduct unreimbursed moving costs including packing, shipping household goods, travel, and lodging. Keep all receipts and mileage logs. This deduction reduces your AGI before other calculations, which can also affect your eligibility for income-based credits and programs.
Earned Income Tax Credit (EITC)
The EITC is a refundable federal tax credit worth up to $8,046 for tax year 2025, depending on income, filing status, and family size. Service members have a valuable option that civilians don’t: you can elect to include nontaxable combat pay as earned income when calculating your EITC eligibility. Depending on your situation, including combat pay could increase your credit. MilTax and VITA volunteers are trained to calculate both options so you can claim whichever is more beneficial.
Child and Dependent Care Credit
Military families frequently qualify for the Child and Dependent Care Credit, which covers expenses incurred for childcare while parents work, train, or deploy. The credit applies to temporary duty (TDY) assignments and reserve drill weekends, not just standard employment. It covers up to $3,000 in expenses for one child or $6,000 for two or more children.
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VA Disability Pay — Always Tax-Free
Veterans’ disability compensation from the VA is fully excluded from federal income tax, regardless of the rating percentage. This includes retroactive payments. Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP) also maintain tax-free status. Military retirement pay, by contrast, is taxed as ordinary income at the federal level — though many states exempt it fully or partially.
Combat Zone and Deployment Tax Rules
Service members deployed to IRS-designated combat zones receive a set of automatic tax accommodations that don’t require any action to activate. Understanding these rules can prevent missed deadlines and penalties.
Automatic Filing Extension
If you’re serving in a designated combat zone on the federal tax deadline (April 15), you automatically receive an extension to file your federal return. The extension generally lasts for the duration of your combat zone service plus 180 days after the last day you’re in the zone. State-specific extension rules vary, so check with your home state’s tax authority.
Combat Pay Exclusion
Enlisted service members and warrant officers can exclude all military pay received during any month they served in a designated combat zone. Officers can exclude up to the highest enlisted pay rate plus any hostile fire or imminent danger pay received. Designated combat zones include areas in the Middle East, parts of Africa, and other qualifying regions — see IRS Publication 3 for the current list.
Filing While Deployed
Service members deployed overseas can file electronically using IRS-approved software, or authorize someone to file on their behalf using IRS Form 2848 (Power of Attorney). DFAS’s myPay portal provides quick access to W-2s and other tax documents, which is particularly useful when you’re stationed far from home.
State Income Tax Considerations
Military tax situations are complicated by state-level rules that vary considerably. A few important principles apply across the board.
Under the Servicemembers Civil Relief Act (SCRA), your legal state of residence does not change simply because you’re assigned to a new duty station. Only your state of legal residence may tax your military pay — meaning if you’re stationed in California but your legal residence is Texas, California cannot tax your military income.
Many states exempt military retirement pay from state income tax entirely. Some states with notable military-friendly tax treatment include Texas, Florida, and Nevada, which have no state income tax at all. Other states, like North Carolina, offer partial exemptions. If you’re a retiree evaluating where to live, state tax treatment of your retirement pay is worth researching as part of that decision. Our state veteran benefits guides cover tax exemptions for each state.
Documents to Gather Before Filing
Having the right paperwork in order before you sit down to file — whether with software or a preparer — saves significant time and helps avoid errors. For military filers, key documents include:
- W-2 from DFAS — available through myPay. Your military W-2 will show your regular base pay in Box 1, but does not include tax-free allowances like BAH and BAS (which are excluded by design).
- Leave and Earnings Statement (LES) — useful for verifying pay periods, combat zone months, and allowance amounts.
- 1099-R — if you received military retirement pay or disability payments.
- VA award letter — if you receive VA disability compensation (though this is not included as income, it may be needed for documentation).
- PCS moving expense receipts — packing costs, mileage logs, lodging receipts for unreimbursed moves.
- Childcare expense receipts — for the Child and Dependent Care Credit.
- State income tax records — especially if you lived in or were stationed in multiple states during the year.
If you can’t locate your W-2 through myPay, you can request a replacement through DFAS or use IRS Form 4506-T to request a wage and income transcript from the IRS.
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Frequently Asked Questions
No. Basic Allowance for Housing (BAH) is excluded from federal gross income and does not appear on your W-2. This includes the supplemental BAH “Warrior Dividend” payment of $1,776 distributed in December 2025, which the IRS officially confirmed is non-taxable. You can still deduct mortgage interest and property taxes paid with your BAH funds if you itemize deductions.
National Guard and Reserve members qualify for MilTax when they are on active duty orders. When not on orders, they generally do not qualify — but may still be eligible for IRS Free File (AGI under $89,000) or VITA assistance at military installations.
If you are serving in a designated combat zone on the filing deadline, you automatically receive an extension. The extension period is generally the duration of your combat zone service plus 180 additional days. No action is required to claim this extension. However, if you owe taxes, interest begins accruing from the original deadline even with the extension — so pay what you can as early as possible.
Yes, military retirement pay is taxed as ordinary income at the federal level. However, many states exempt it from state income tax partially or entirely. VA disability compensation is always tax-free at the federal level, regardless of rating.
Yes. Service members have the option to elect to include nontaxable combat pay as earned income when determining EITC eligibility. This can result in a larger credit for some filers. MilTax and VITA volunteers will calculate your EITC under both scenarios so you can choose whichever is more beneficial.
USMilitary.org is an independent educational resource not affiliated with the Department of Defense, VA, or any government agency. This article is for informational purposes and does not constitute tax advice. For personalized tax guidance, consult a qualified tax professional or contact a MilTax consultant at 800-342-9647.
As a Veteran, your advice please. My wife has been stranded in Taiwan since the outbreak of the covid business. She is a US citizen. I have had to set up a place in Taiwan to live, a rental apartment. Are the costs associated with deductible on our 2021 taxes? Thank You
Are Grandparents with my Grandson in the Air Force reserves entitled to any of the offers?
I have found very little support for my grandchildren and I am a 100% Disabled Vietnam Veteran. Even my own adult offspring have almost no benefits. My Wife is on Champ VA and receives very good care as I do.