Combat Pay

AAA

DEFINITION of 'Combat Pay'

A tax-free form of compensation paid to members of the armed forces who are on active duty in a designated combat zone or hazardous duty area. Combat pay includes active duty pay, dislocation allowances, reenlistment bonuses, achievement awards, pay for accrued leave and other miscellaneous types of compensation that are paid as a result of military service.

INVESTOPEDIA EXPLAINS 'Combat Pay'

Military personnel who serve in a combat or hazardous duty zone for any time during the month will receive tax-free combat pay for that entire month. If they are hospitalized as a result of injury or illness of any kind that was received in one of these zones, then their pay received during convalescence will be excluded.

RELATED TERMS
  1. War Bond

    Debt securities issued by a government for the purpose of financing ...
  2. Combat Zone

    An area designated as a war zone during a specified period. Members ...
  3. Exempt Income

    Certain types or amounts of income not subject to federal income ...
  4. Political Risk

    The risk that an investment's returns could suffer as a result ...
  5. Heroes Earned Retirement Opportunities ...

    Legislation passed by Congress on May 18, 2006, that allows tax-free ...
  6. Golden Bungee

    A benefit conferred to select top executives that is a combination ...
Related Articles
  1. Are there special benefits for U.S. ...
    Retirement

    Are there special benefits for U.S. ...

  2. Preparing Finances For Deployment: A ...
    Personal Finance

    Preparing Finances For Deployment: A ...

  3. 3 Retirement Account Rules To Know
    Taxes

    3 Retirement Account Rules To Know

  4. Benefits for Members of the Armed Forces
    Retirement

    Benefits for Members of the Armed Forces

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center