Military Allowances: Which Pay Items Are Excluded From Income
Published November 7, 2026
Publication 3 (2025), Armed Forces' Tax Guide, explains tax rules for members of the uniformed services. Table 2 in the publication lists servicemembers' government pay items that are excluded from gross income. This guide summarizes that table and the rules around it. It is general information. It is not advice about your case.
It separates the two lists. Table 1 shows items that are taxable. Table 2 shows items that are excluded. If an item appears in neither table, check the return instructions. It also has a section called Income Items of Special Interest. It explains some items in more detail, including BAH. Read that section if your pay includes one of them.
The basic rule
The exclusion applies to certain items. It applies whether the item is furnished in kind or is a reimbursement or allowance. In other words, an allowance can be excluded. So can an item provided to you directly. It also says the list in Table 2 is not exclusive. Table 1 lists items that are taxable. Check the return instructions for specific items that are not on either list.
Living allowances
Table 2 lists living allowances. They include the basic allowance for housing (BAH) and the basic allowance for subsistence (BAS). They also include housing and cost-of-living allowances abroad, and the overseas housing allowance (OHA). These payments help cover housing and food. Table 2 lists them as excluded.
It also addresses expenses you pay with BAH. It says BAH is excluded from income. That does not stop you from deducting certain expenses paid with that money. It notes that you may still deduct mortgage interest. You may also deduct real estate taxes on your home. Keep records that show which expenses you claim.
Moving allowances
Table 2 also lists moving allowances. These include dislocation allowances, move-in housing, and storage. They also include moving household items, personal items, trailers, and mobile homes, plus temporary lodging. Table 2 lists these as excluded items. It lists temporary lodging among the moving allowances. Keep receipts for those costs. Keep the orders and records for each move. If you deducted a move-related expense, check whether an excluded allowance paid for it. For the moving expense form, see Military Moves: Moving Expenses and Form 3903.
Uniform, family, and other allowances
Table 2 lists uniform allowances. It also lists family allowances, such as certain emergency and separation allowances. It lists death gratuity payments to eligible survivors too. Other items include burial services and travel of dependents to a burial site. The table also lists the annual round trip for dependent students. It lists many more items, so check the table itself for the full set.
Commissioned officers
It notes that the exclusion for certain officers is limited. The rules for commissioned officers, other than commissioned warrant officers, are in a separate section. If you are a commissioned officer, read that section first.
Combat zone pay
Pay for active service in a combat zone is listed in Table 2 as excluded. Combat zone pay is excluded even when it would otherwise be taxable. That exclusion has its own rules and limits. It also covers filing and payment deadlines for people in a combat zone. For the exclusion itself, see Combat Zone Pay: The Military Exclusion.
When the table is not enough
Table 2 does not answer every question. Some items depend on your rank, your orders, or the year. Read the instructions for the return you file. Keep the statements that support each entry. If you are unsure about one item, ask a tax professional before you file.
Records and next steps
Save your leave and earnings statement for each year. It helps you compare the amounts. The return instructions cover many specific items. Keep the orders for any move, and keep records of any allowance you receive. Compare your statement with Table 1 and Table 2. Then check the instructions for your return. If your pay has several allowances, or a move crossed tax years, consider a tax professional. Choose one who works with military families.
Sources: Sources: IRS, Publication 3 (2025), Armed Forces' Tax Guide (https://www.irs.gov/pub/irs-pdf/p3.pdf) This is general information, not advice about your specific return.
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