DEFINITION of Combat Zone

Combat zone is an area designated as a war zone during a specified period for the purposes of reporting to the Internal Revenue Service (IRS) by military personnel. Members of the military receive a number of tax benefits while working in a combat zone.


The IRS formally defines a combat zone as "any area the President of the United States designates by Executive order as an area in which the U.S. Armed Forces are engaging or have engaged in combat. An area usually becomes a combat zone and ceases to be a combat zone on the dates the President designates by Executive order."

Military members are allowed to exclude from gross income reporting to the IRS any compensation earned during service in a combat zone. They also may exclude reenlistment bonuses, pay for accrued leave, and miscellaneous items (e.g., awards) received during periods in a combat zone. The amount of exclusion, however, is limited to the highest rate of enlisted pay plus "imminent danger/hostile fire" pay for each month during any part of which a military personnel served in a combat zone or was hospitalized as a result of service in a zone.

Where Are the Combat Zones?

Among the main combat zones as of 2018 per Executive order are Afghanistan Area (Executive Order No. 13239), which encompasses Afghanistan, Pakistan, Somalia, Syria and other surrounding countries; Kosovo Area; and the Arabian Peninsula Area. Under the 2017 Tax Cut and Jobs Act, the Sinai Peninsula was included in the list of recognized combat zones. The U.S. is not actively engaged in actual combat in all of the countries on the combat zone list. The list also includes combat support areas and contingency operations areas.