Some benefits, deductions and credits that were available in the past few years because of the pandemic have gone away or reverted back to pre-COVID levels, said Susan Mitchell, DoD tax counsel and executive director of the Armed Forces Tax Council. For example, the child tax credit is lower than it was in 2021, and both the child and dependent care credit and the earned income tax credit revert back to pre-COVID levels.<\/p>\n\n\n\n
The basics<\/h2>\n\n\n\n
The deadline for filing, or to file an extension, and pay your taxes, is Tuesday, April 18. (The 15th falls on a Saturday and Monday the 17th is Emancipation Day in some jurisdictions.) There are also some longstanding tax filing extensions available for certain service members. If stationed outside the U.S. and Puerto Rico, troops can qualify for an automatic two-month extension until June 15, both for filing and paying taxes that are due. This extension <\/u>is designed to help troops overseas who may have trouble getting all the documents they need.<\/p>\n\n\n\n
Those overseas who can\u2019t file by that extension can request an additional extension, until Oct. 16.<\/p>\n\n\n\n
Remember that any taxes due must be paid by that April 18 deadline (or the June 15 deadline, if overseas) or you <\/u>could be subject to both interest charges and a failure-to-pay penalty, Mitchell said.<\/p>\n\n\n\n
Special rules apply for service members deployed to a combat zone<\/a>. The deadline for filing and paying taxes is generally extended for their period of service in the combat zone plus 180 days after their last day in the combat zone.<\/p>\n\n\n\n The EITC applies to eligible low- and moderate-income workers, subject to certain qualifying rules. The credit could reduce the amount of taxes owed and perhaps increase your refund. There are special EITC rules and considerations for military members who receive nontaxable pay such as a housing allowance or who are stationed outside the United States. For more information, v This credit is phased out at certain income levels and number of dependents. It is completely phased out for married couples filing jointly with an earned income of $59,187 or more with three or more children.<\/p>\n\n\n\n You may qualify for the EITC even if you can\u2019t claim children on your tax return. The minimum age for a childless worker to qualify for the credit reverts back to 25, compared to age 19 in 2021. The maximum age of 65 has also been reinstated, after being eliminated for 2021.<\/p>\n\n\n\n Child tax credit:<\/b> This credit is lower than it was in 2021, when it received a one-year, temporary bump. Tax credits reduce the amount of taxes you owe, dollar for dollar, which is typically better than a deduction, which reduces the amount of your income that is subject to tax, Mitchell notes.<\/p>\n\n\n\n For tax year 2022, the child tax credit is $2,000 per child age 16 or younger. It\u2019s also subject to phase out as income rises, starting at $400,000 for joint filers and $200,000 for single filers.<\/p>\n\n\n\n Child and dependent care credit:<\/b> You may be able to claim the child and dependent care credit if you paid for the care of a qualifying individual to enable you \u2014 and your spouse, if filing a joint return \u2014 to work or actively look for work, according to the IRS. Generally, you may not take this credit if you are married and filing separately. However, see What\u2019s Your Filing Status? in IRS Publication 503, Child and Dependent Care Expenses<\/a>, which describes exceptions to the rule.<\/p>\n\n\n\n The amount of the credit is a percentage of the amount of you paid to a provider while you worked or looked for work. That percentage depends on your adjusted gross income, but the maximum credit is 35% of your eligible expenses. There are limits, however.<\/p>\n\n\n\n For 2022, you may claim up to $3,000 in expenses if you had one qualifying dependent, or $6,000 if you had two or more. So, when the maximum 35% credit is applied, that puts the top credit at $1,050 for one child; and $2,100 (35% of $6,000) for more than one child. The more you earn, the lower the percentage of employment-related expenses that are allowed. Once your adjusted gross income is over $43,000, the maximum credit is 20% of your employment-related expenses, according to the IRS.<\/p>\n\n\n\n \u2666 A number of military spouses are teachers, and the deduction has increased to $300 for out-of-pocket expenses for supplies, books, COVID-19 protective items or other materials. That\u2019s up from $250 in 2021.<\/p>\n\n\n\n \u2666 The \u201ckiddie tax\u201d takes less of a bite, Mitchell notes. This tax on income-generating assets in a custodial account was enacted to discourage wealthier individuals from transferring assets to their children to take advantage of lower tax rates.<\/p>\n\n\n\n The first $1,150 of a child\u2019s unearned income is tax free for those 18 or younger, or if the child is a full-time student under age 24, up from $1,100 in 2021. The next $1,150 is taxed at the child\u2019s rate. Any excess over $2,300 is taxed at the parent\u2019s rate.<\/p>\n\n\n\n \u2666 Taxpayers can deduct the cost of operating an automobile for business, charitable, medical or moving expense purposes. Taxpayers may use the optional standard mileage rates, but there are two rates for 2022. For the last six months of 2022, the standard rate for business travel was 62.5 cents per mile, up 4 cents from the rate effective for the first six months of the year. The rate for deductible medical or moving expenses was 22 cents for the last six months of the year, also up 4 cents from the first half. Unlike most others, military members can take deductions on out-of-pocket moving expenses<\/a>.<\/p>\n\n\n\n \u2666 Employers were allowed to provide more tax-free benefits for parking and transportation, up to $280 per month in 2022.<\/p>\n\n\n\n \u2666 Itemized deductions haven\u2019t changed much. The deduction for state and local income taxes, property taxes, real estate taxes is still capped at $10,000. The home mortgage interest deduction is still limited to $750,000 of mortgage debt.<\/p>\n\n\n\n Mitchell highlights a change affecting military spouses and service members who operate a business selling goods or services, which is resulting in questions from the field. Starting with tax year 2022, third-party payment networks, such as PayPal and Venmo, are required to send you a form 1099K if you have been paid more than $600 during the year for goods and services, regardless of the number of transactions. Previously, that 1099K was only sent to those receiving more than $20,000 in gross payments, with more than 200 transactions.<\/p>\n\n\n\n \u201cAny time you receive income, you are reporting that as income. But the 1099K shows you the third party also reported it to the Internal Revenue Service,\u201d Mitchell said. \u201cThe 1099K generally is going to show the amount you owe income tax on, that they count as gross income.\u201d<\/p>\n\n\n\n This only applies to goods and services, and doesn\u2019t apply to payments from family and friends, Mitchell said.<\/p>\n\n\n\n Some states don\u2019t have an income tax. Other states have decreased or eliminated state taxes on military retirement income.<\/p>\n\n\n\n For example, in 2022, Virginia enacted a law that gradually phases out taxes on military retirement for retirees age 55 and older, up to a cap of $40,000. It starts with tax year 2022, when the first $10,000 of their retirement pay is tax free. By 2024, up to $40,000 of military retirement pay is tax free. Be sure to check out your state\u2019s laws.<\/p>\n\n\n\n Civilians, including military retirees, in Hawaii who were affected by the toxic, fuel-tainted water in Hawaii<\/a> in late 2021 and early 2022 were sent 1099 forms from the Defense Finance and Accounting Service, reporting as income the reimbursements they received from the military.<\/p>\n\n\n\n The Internal Revenue Service announced Wednesday that these civilians won\u2019t have to pay taxes on the reimbursements they received from the Defense Department.<\/p>\n\n\n\t![\"\"](\"\/wp-content\/uploads\/2026\/08\/Tax-help-at-McConnell-AFB.6553576.jpg.jpg\")
Earned Income Tax Credit<\/h2>\n\n\n\n
i<\/del>sit the IRS page on the EITC for military members<\/a>.<\/p>\n\n\n\nChild and dependent credits<\/h2>\n\n\n\n
Other notable changes<\/h2>\n\n\n\n
What\u2019s that form 1099K?<\/h2>\n\n\n\n
State treatment of military retirement income<\/h2>\n\n\n\n
Tax issues from toxic-water relief in Hawaii<\/h2>\n\n\n\n