Military and Veterans Tax Relief
Rates and standards last checked against IRS.gov: November 6, 2026
Servicemembers get IRS protections other taxpayers don't: extra time in a combat zone, a way to defer payment during service, and a cap on interest. Here's how each one works.
Quick answer
What tax relief do servicemembers get if they owe the IRS?
Serving in a combat zone or contingency operation extends IRS deadlines by at least 180 days after you leave, with no penalties or interest for that time. Outside a combat zone, you can ask to defer payment if service affected your ability to pay, and interest is capped at 6% while you serve.
Who this applies to: Members of the U.S. Armed Forces, including qualifying National Guard service, and in some cases their spouses and support personnel.
What can change this answer
- Deferment requires that service materially affected your ability to pay.
- Send orders for the 6% cap within 180 days after release.
- VA benefits aren't taxable income.
Recommended next step
If you've received an IRS notice, send a written deferment request with your orders to the office that issued it.
Reviewed by Joseph Lancaster, 13+ years in tax resolution.
Key facts
| Item | Fact | Source |
|---|---|---|
| Combat zone deadline extension | 180 days after you leave, plus the days left when you entered | IRS Publication 3, Armed Forces' Tax Guide |
| What the extension covers | Filing, paying, refund claims, and IRS assessment and collection | IRS Publication 3, Armed Forces' Tax Guide |
| Penalties during the extension | None for filing or paying late during the extension period | IRS Publication 3, Armed Forces' Tax Guide |
| Payment deferment (not in a combat zone) | Up to 180 days after release, if service materially affects ability to pay | IRS Publication 3, Armed Forces' Tax Guide |
| Interest cap if deferment is denied | 6% a year while in active military service | IRS Publication 3, Armed Forces' Tax Guide |
| VA benefits | Not taxable | IRS Publication 525, Taxable and Nontaxable Income |
Compiled November 10, 2026 from the linked primary sources.
Combat zone deadline extensions
If you serve in a combat zone, have qualifying service outside one, or deploy outside the U.S. in a contingency operation, your IRS deadlines are extended for 180 days after your last day there, or after a qualifying hospitalization ends. The IRS then adds the days you had left to act when you entered. The extension applies to:
- Filing any income, estate, gift, employment or excise tax return
- Paying those taxes
- Filing a claim for a refund, or a Tax Court petition
- The IRS assessing tax, sending a demand for payment, or collecting
- Making a qualified IRA contribution
No penalties or interest are charged for failing to file or pay during the extension period. Time missing in action or as a prisoner of war counts as combat zone time.
If the IRS acts during your extension
Deferring payment during military service
You don't have to be in a combat zone to get help. If military service makes it harder to pay income tax that came due before or during your service, you can ask the IRS to defer payment.
- You must be performing military service, and it must have materially affected your ability to pay
- You get up to 180 days after termination or release from service to pay
- Pay in full by then and you owe no interest or penalties for that period
- If granted, the IRS collection period is suspended during service plus 270 days
- It doesn't cover the employee share of Social Security and Medicare taxes
The request must be in writing. If you already have an IRS payment plan, send it to the office that manages the plan. If not, wait for a notice asking for payment, then send it to the office that issued that notice. The IRS tells you its decision in writing.
The 6% interest cap
If your deferment request is denied, the IRS charges no more than 6% interest a year while you're in active military service. This applies whether or not your service affected your ability to pay. To claim it, send the IRS a copy of your orders or reporting instructions no later than 180 days after you're released from service.
The cap limits interest. Penalties are a separate charge; see whether penalty abatement could remove them.
Veterans: what is and isn't taxable
Benefits paid under any law administered by the Department of Veterans Affairs aren't taxable, according to IRS Publication 525. That includes VA education and training allowances. Military retirement pay is a separate matter; Publication 525 explains when it's taxable.
If you owe the IRS from years in or after service, your IRS account transcript shows each year's balance. Free tax help is available at most installation legal assistance offices and through MilTax from Military OneSource.
What to include in a written payment deferment request
The IRS lists these items for a request to defer payment because of military service.
- Your name and Social Security number.
- Your monthly income, and its source, before military service.
- Your current monthly income.
- If your income went up, the expenses your military service caused and their amounts.
- Your military rank, the date you entered service, and the date you can be discharged.
- A copy of your orders, if you can include it.
Frequently asked questions
How long is the combat zone deadline extension?
180 days after your last day in the combat zone or contingency operation, or after a qualifying hospitalization ends. The IRS then adds the number of days you had left to act when you entered.
Do I owe penalties or interest for the extension period?
No. The IRS says no penalties or interest are imposed for failing to file or pay during the extension period.
Does my spouse get the extension too?
Generally yes, with two exceptions: it doesn't cover a tax year beginning more than 2 years after the area stops being a combat zone, or any period you're hospitalized in the U.S. for a combat injury.
Can I defer payment if I'm not in a combat zone?
Yes, if you're performing military service and it has materially affected your ability to pay. You get up to 180 days after release from service to pay, with no interest or penalties if you pay in full by then.
What is the 6% interest cap?
If your deferment request is denied, the IRS charges no more than 6% interest a year while you're in active military service. Send a copy of your orders no later than 180 days after you're released.
Are VA disability benefits taxable?
No. Publication 525 says benefits paid under any law administered by the Department of Veterans Affairs aren't included in income.
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