Combat Zone Tax Exclusion (CZTE): How Combat Pay Becomes Tax-Free
Serve even one day in a designated combat zone during a month and your military pay for that entire month can be excluded from federal income tax. For enlisted members and warrant officers, the exclusion is unlimited; for officers it's capped.
Who gets what
- Enlisted & warrant officers: all basic pay and most special pays for the month are federally tax-free.
- Commissioned officers: the exclusion is capped at the highest enlisted basic pay rate plus $225 hostile-fire/imminent-danger pay (about $10,954/month in 2026). Pay above the cap is taxed normally.
What CZTE does not change
FICA still applies. Social Security (6.2%) and Medicare (1.45%) are still withheld from basic pay even in a combat zone. BAH and BAS were already tax-free.
Side benefits
- Roth TSP supercharge: combat-zone pay contributed to Roth TSP is tax-free going in and, if qualified, tax-free coming out.
- Higher TSP ceiling: combat-zone months allow contributions beyond the normal elective limit.
- State taxes: most states follow the federal exclusion, and many exempt military pay anyway.
Toggle 'Combat Zone Tax Exclusion' in the calculator to see your deployed take-home pay.
Calculate my pay →Frequently asked questions
Is combat pay tax-free?
Yes. Pay earned in a designated combat zone is excluded from federal income tax — fully for enlisted members and warrant officers, capped for officers.
Do I pay Social Security and Medicare in a combat zone?
Yes. FICA (6.2% Social Security + 1.45% Medicare) still applies to basic pay even when CZTE makes it income-tax-free.
How much of an officer's pay is excluded?
Up to the highest enlisted basic pay plus $225 IDP — about $10,954/month in 2026. Pay above that is taxed normally.