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All military members saw a significant pay raise in January 2025, but some troops will get even more this spring.

Congress approved a massive pay raise for junior enlisted service members in late 2024, which is set to go into effect April. The move will bring paychecks for nearly all troops to more than $30,000 annually.

Basic pay is determined by a person’s rank and length of service, with automatic raises when troops meet certain time and promotion markers. Congress also determines how large of a pay raise all troops should receive each year.

The figure is tied by law to the anticipated increase in private-sector pay, but lawmakers in the past have approved bigger raises to help with recruitment and retention, or smaller raises to save money for other military priorities.

Currently, the most junior enlisted service members make around $24,000 a year in basic pay (not including allowances, special pay and other benefits), while enlisted troops nearing retirement typically earn about $70,000 annually.

Officer pay is significantly higher. Junior officers earn close to $40,000 a year, while senior officers nearing 20 years of service can make in excess of $170,000. That means that even a small change in the anticipated pay raise calculations can make a big difference for military families.

The annual military pay increase takes effect in January each year. In 2025, that pay raise was 4.5% for all troops, the third consecutive year of across-the-board paycheck boosts of more than 4% for the military.

For an E-7 with 10 years military experience, or an O-2 with two years experience, the 4.5% raise means about $200 more each month and roughly $2,600 a year in extra salary.

Targeted pay raises

In a normal year, that January pay boost is the only salary increase troops see. But because of legislation passed last year, junior enlisted troops (those ranked E-4 and below) will see an additional 10% pay increase this spring, giving their paychecks a welcome mid-year raise.

The junior enlisted boost is expected to benefit tens of thousands of young troops. Those ranked E-2 with two years service would see their base salary rise from about $27,000 now to $31,000 a year. Troops ranked E-4 with three years in the armed forces would see their pay rise from $35,000 a year to more than $40,000 annually.

The White House issues its target for the hike each August, either going along with the projected rise in private-sector wages, known as the Employment Cost Index, or offering justification for proposing a different rate.

Congress has the final say. In the past, lawmakers have overridden attempts by the White House to submit lower pay raises that would save money for other priorities.

But in recent years, the executive and legislative branches have been in sync on the annual pay raise. Congress has not adopted a raise below the ECI calculation since 2015.

2026 pay boost

Since the start of the all-volunteer military force in 1973, Congress has authorized a pay raise of at least 1% for troops every year, even during budget cycles where other civilian wages held steady. Those increases have grown to 2.5% or more since 2018.

The 2024 pay increase, which took effect Jan. 1 of that year, was 5.2% — the largest bump since 2002 and the second-biggest boost in 40 years. The 2025 raise of 4.5% was not quite as generous, but still means that military pay grew by nearly 10% over the last two years.

Both of those pay boosts matched the federal formula based on the annual Employment Cost Index calculation, and somewhat offset concerns about covering increased living costs over the last few years.

The ECI calculation for 2026 sits at 3.8%. If approved, it would be the lowest pay raise since 2022 — which was 2.7% — but would still be higher than any of the raises military members received between 2010 and 2022.

For junior enlisted troops, that proposed 2026 raise would mean about $1,200 more in take-home pay next year. For senior enlisted and junior officers, the raise would add about $2,500 more. An O-4 with 12 years of service would see almost $4,300 more over 2025 pay levels.

Lawmakers are expected to debate the pay raise level along with the rest of the defense budget over the spring and summer.

Congress typically fails to approve the federal budget until late in the calendar year, after each fiscal year begins Oct. 1. But the new pay raise still goes into effect on Jan. 1 annually.

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The military’s housing stipend, known as the Basic Allowance for Housing, increased by an average of 5.4% per person in January 2025, the same percentage increase troops saw in 2024. Whether service members saw a larger or smaller increase than average depends on their location.

BAH rates are typically adjusted once a year and take effect Jan. 1. However, DOD in the post-pandemic years took additional steps to ease the burden of surging housing costs on service members. The Pentagon provided temporary out-of-cycle increases in BAH for some hard-hit areas in 2021 and 2022; it also bumped up the rate by 12.1%, on average, in 2023 — the largest increase in 15 years.

Meanwhile, the military is continuing to study how BAH is calculated and whether the stipend meets the needs of service members.

What is BAH?

The Basic Allowance for Housing provides compensation for the housing costs of active duty troops stationed in the 50 U.S. states who do not live on government-owned property. Stipend amounts are tied to local market rates and depend on recipients’ rank, whether they have dependents and where they are based.

The tax-free benefit is intended to cover 95% of the estimated average housing costs, including utilities, at each assigned duty post in the United States. Individual service members are expected to pay the remaining 5% of housing costs out of pocket. Congress or the Pentagon could boost the stipend to cover 100% of those projected expenses instead.

Most service members can choose where to live. Those living in privatized housing — owned and operated by civilian companies for the military — also receive BAH, but the allowance typically goes straight to their landlord each month.

If troops can find housing in the civilian community that’s cheaper than the BAH rate for their assigned location, they can pocket the difference. And if homes are more expensive than what BAH will cover, troops pay for the overage.

Those stationed in U.S. territories or overseas who are not provided government housing are eligible for an overseas housing allowance, which is calculated under a separate formula. That allowance partially offsets housing expenses at overseas duty locations when service members live in privately leased housing on the local economy.

How BAH is calculated

DOD conducts a survey to calculate median rental costs for 300 military housing areas, including Alaska and Hawaii. Calculations are based on the rental costs of a one- or two-bedroom apartment, a two- or three-bedroom townhome and a two- or three-bedroom single-family home. The BAH for junior enlisted, for example, might be based on the equivalent of a small apartment, while the allowance for more senior enlisted and officers might be based on the equivalent of a house.

Two rates — with and without dependents — are set for each location. Personnel with at least one dependent, whether a spouse or a child, qualify for the dependents rate. It does not increase for additional family members.

For dual-military couples with no children, both spouses get the without-dependents rate. If the couple has children, one spouse receives the with-dependent BAH rate, while the other gets the without-dependents rate.

BAH varies widely. For details of locations across the country, you can use the Defense Department’s official BAH calculator.

Service members receive BAH rate protection as long as they remain in their home, even if rates drop. However, if they move, are demoted or their dependency status changes, they will receive the rate for their new status.

If rates rise in a location, all service members receive the higher rates, regardless of when they arrived.

Find more information on BAH on DOD’s website.

Basic Needs Allowance

A new Basic Needs Allowance for low-income military families took effect Jan. 1, 2023. The payout is designed to serve as a safety net for individuals whose total family income, including the spouse’s income, falls below 150% of the annual federal poverty guidelines. But for many members, the housing allowance bumps them above the income threshold. The law was changed in late 2024 to expand eligibility to those whose total family income falls below 200% of the annual federal poverty guidelines.

Service officials continually screen service members and notify those who may be eligible. Once people are told they could qualify, they must submit an application and go through a final income screening to determine whether they can receive the benefit.

DOD policy allows service members who believe they may qualify for the benefit, but haven’t been screened as eligible, to apply on their own. They should contact their financial counselors for help.

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All service members entering the military are automatically enrolled in the Blended Retirement System, or BRS. Only those who served before 2018 remain in the legacy, all-or-nothing 20-year pension plan.

BRS combines the traditional monthly retirement checks of the legacy system with new features that let military members take some government benefits with them, even if they don’t serve for 20 years to qualify for a pension. Historically, only 19% of active duty troops and 14% of Guardsmen and reservists in the legacy system stayed in uniform long enough to earn retirement benefits.

More than 400,000 eligible service members opted into the new BRS in 2018, out of the 1.6 million current active duty and Reserve troops who were eligible to choose between the legacy system and the new option.

Whether opting into the BRS or automatically enrolled, it’s important to pay attention to the key elements of the BRS — a critical part of your financial future.

Retirement pay

Under the BRS, you’ll get the traditional monthly retirement pay for life if you serve for at least 20 years to earn a full retirement from the military. But monthly payments under the BRS are 20% smaller than in the legacy system.

For BRS participants who retire after 20 years of active duty service, retirement pay is tallied by averaging the 36 highest months of active duty pay received while in uniform, then calculating 40% of that average.

That percentage increases by 2% for each additional year of service. (The legacy benefit provided 50% of the highest 36 months of pay.)

Retirement pay also includes an annual cost-of-living adjustment.

Thrift Savings Plan

The Thrift Savings Plan, or TSP, is like a private-sector 401(k) retirement savings account. The government began matching user contributions in 2018. While troops always have ownership of the money they put toward a TSP, they can’t access the funds contributed by DOD until they’ve served for at least two years.

Here’s how it works: A TSP account will be created after you have served for 60 days, and 3% of your basic pay is automatically deducted from each paycheck to fund it. You can change that amount, but by law, you will be reenrolled at 3% each year.

The Defense Department will automatically match 1% of that base pay, but can kick in as much as 5%. To make the most of your benefits, make sure you’re contributing at least 5% to your TSP to get the matching federal contribution of 5% as well. Why turn down free money?

If preferred, troops can contribute more than 5%, up to a limit of $23,000 in tax year 2024. For those with civilian retirement accounts such as a 401(k), as well as a TSP, contribution limits apply to the combined amounts.

Continuation pay

When troops hit 12 years of service, they qualify for another source of money: Continuation pay.

To receive that one-time payout, which is similar to a retention bonus, a person must commit to stay in their service branch for four more years.

Here’s what that means for active duty, Guard and reserve troops in each service in 2025:

• Air Force and Space Force: Continuation pay rates had not been released by publication date.
• Navy: Continuation pay equals 2.5 times the monthly basic pay an active duty sailor earned on the first day of their 12th year of service; Navy Reservists earn half of their monthly pay.
• Marine Corps: Active duty Marines receive five times their monthly basic pay; reservists earn a full month’s pay.
• Army: Active duty soldiers receive 2.5 times their monthly basic pay; reservists also receive 2.5 times their monthly basic pay.

It’s each service’s prerogative to adjust that multiplier to meet retention needs and other requirements.

Continuation pay is taxable. You can receive it in a lump sum or, to help reduce the tax burden, in four equal installments over four years. You can also contribute all or part of it to your TSP.

Lump sum retirement pay option

When you leave military service under the Blended Retirement System, you can ask for the retirement pay you’d earn until you reach full Social Security retirement age — for most people, that’s 67 — as a lump sum.

Here’s how the lump sum is calculated: First, the federal government takes the full monthly pay available to a retiree and reduces it by a percentage that changes yearly. For 2025, it’s a 6.33% cut. Then retirees can take either 25% or 50% of that smaller pot as a single installment; the rest would stay as monthly paychecks.

For instance, if someone retires at age 40, their lump sum would equal one-quarter or half of that reduced amount of total retirement pay they would otherwise receive monthly between ages 40-67.

They would receive that lump sum in addition to smaller monthly payouts. Then their retirement checks would return to their full monthly amount starting at age 67.

The lump sum is taxable; retirees can choose to receive the money in up to four installments over four years to reduce the tax burden.

Find more information about BRS via the Defense Department.

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The military helps troops and veterans achieve their educational goals with financial assistance offered through a number of programs.

Post-9/11 GI Bill

The Post-9/11 GI Bill is a benefit for the latest generation of service members and veterans, as well as their eligible dependents. It includes payment of tuition and fees, a monthly housing allowance and a stipend for textbooks and supplies.

The amount of time a veteran spends on active duty determines their benefit level. In general, the higher the level, the less individuals have to pay out of pocket for school. The benefit maxes out at full coverage of in-state tuition at public universities.

Here’s what veterans who received an honorable discharge after Sept. 10, 2001, are eligible for, based on the amount of time they’ve served:

• 100%: 36 months or more of active duty service, or discharged after at least 30 continuous days due to a service-connected disability
• 90%: 30-36 months
• 80%: 24-30 months
• 70%: 18-24 months
• 60%: 6-18 months
• 50%: 90 days-6 months
• No benefit: Fewer than 90 days

Veterans who served before Sept. 10, 2001, are not eligible for the Post-9/11 GI Bill.

Another deadline vets should be aware of: If someone’s service ended before Jan. 1, 2013, their Post-9/11 GI Bill benefits will expire 15 years after they last separated from active duty. If their service ended in 2013 or later, the benefit does not expire.

Veterans can use the Post-9/11 GI Bill to pay for courses at a college, university, trade school, flight school or apprenticeship program.

While the benefit covers all in-state tuition and fees at public institutions, it may not have the same reach at a private or foreign school. The maximum tuition coverage for private nonprofit, private for-profit and foreign schools for the 2024-2025 school year was $28,937.09. That figure is expected to increase again in August.

The housing stipends GI Bill users receive depend on the level of benefits they’re eligible for, how many courses they take and where they go to class.

The rate is determined by the Defense Department’s Basic Allowance for Housing scale and is paid at the same rate an active duty E-5 with dependents would receive in a particular area. If veterans are pursuing a degree entirely online, they will get half of the national BAH average.

Congress passed changes to the program at the start of the coronavirus pandemic to allow students forced online by campus closures and virus mitigation efforts to receive full housing benefits. Those protections have now expired, but could be used again in similar cases of national emergency under legislation enacted in 2022.

In the past, the Department of Veterans Affairs based the housing allowance on the location of a school’s main campus, even if a student took classes at a different branch. However, in 2019, the “Forever GI Bill” directed the VA to instead link the housing stipend to the location where a student attends most of their classes.

Service members may transfer their benefits to a dependent, provided they have already served in the military for at least six years and agree to serve for four more after DOD approves the transfer.

The transfer must happen while an individual is still in uniform. Veterans who have already separated from the military are not eligible to transfer their benefits. Children are only eligible to start using the transferred benefits after the service member who gave them the funds has completed at least 10 years of service. Spouses can use the transferred benefits right away.

Following a Supreme Court decision in 2024, veterans who earned both Montgomery GI Bill and Post-9/11 GI Bill benefits while completing two separate periods of military service may be eligible to receive 12 additional months of educational payouts, above the 36 that either program currently provides. Veterans should contact VA for information on eligibility and delivery of the extra stipends.

Active duty service members in August 2022 became eligible for the VA Yellow Ribbon program, which allows private schools to match VA benefits with their own tuition assistance.

More details about the GI Bill are available here: https://www.militarytimes.com/education-transition/2019/07/20/gi-bill-benefits-guide/

The VA also maintains a GI Bill Comparison Tool, found here: https://www.va.gov/education/gi-bill-comparison-tool/

Veterans can apply for the Post-9/11 GI Bill online — https://www.benefits.va.gov/gibill/ — or by visiting their local VA regional office. If a beneficiary has already chosen a school or program, arrange a meeting with the institution’s VA certifying official, who can help get the process started.

Tuition assistance

While troops can begin to use their GI Bill benefits on active duty, their service branch can often help them pay for college by using tuition assistance first — saving the GI Bill for later.

TA is a federal benefit that covers the cost of tuition, up to certain limits, for active duty service members, as well as some members of the National Guard and reserves. The military services directly pay those funds to schools. Generally, all service members must have enough time remaining in service to complete any courses in which they enroll and must meet minimum grade standards to remain eligible for the program.

Each service has its own requirements.

• Air Force: All officers incur a service requirement if they use TA, but there is no service-length requirement to begin using the benefit.
• Navy: Enlisted sailors and officers, including Navy reservists, must have a minimum of three years of military service before becoming eligible to use TA.
• Army: Active duty officers incur a two-year service obligation if they enroll in classes. Reserve component officers incur a four-year service obligation.
• Marine Corps: Marines must agree to at least two more years of active duty service to use the benefit.
• Coast Guard: Active duty members must have been on long-term active orders for more than 180 days to access TA. The Coast Guard also has unit-specific requirements and requires commanding officer approval.
• National Guard/reserve: Soldiers who are activated or on drill status are eligible under the same conditions as active duty Army personnel. Air National Guardsmen and reservists of other branches are eligible for TA if they are activated, and the use of TA often comes with a service obligation once the last course is completed.

All of the services cap tuition assistance at $250 per credit hour and $4,500 per fiscal year.

Generally, TA funds can be used to pursue a higher degree than what troops have already earned, up to a master’s degree. For instance, if someone has a bachelor’s degree, they can then pursue a graduate degree — not an associate degree or a second bachelor’s degree, though there are some exceptions.

Some branches require troops to create a degree plan or take a branch-specific course before TA benefits are approved.

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The Department of Veterans Affairs home loan program has been used by millions of service members and veterans since it took shape near the end of World War II. It continues to be one of the most popular benefits for veterans.

Lenders issued 416,373 VA-backed loans totaling more than $155 billion in fiscal 2024, with an average loan amount of $373,291, according to the VA.

The VA doesn’t issue the loans itself, but backs loans issued by financial institutions. The VA guarantees a percentage of an eligible beneficiary’s loan to purchase or refinance a home, allowing the lender to provide better, more affordable terms and often letting the borrower seal the deal without a big cash down payment.

Eligible service members and veterans can apply for home-purchase loans via private-sector lenders. There are no VA loan limits for veterans who have the full entitlement. For a VA-backed home loan, you’ll still need to meet your lender’s credit and income loan requirements in order to receive financing. These VA home purchase loans can be used to buy manufactured homes or homes under construction, in some cases, but not mobile homes.

The VA loan program also offers cash-out refinance loans.

An Interest Rate Reduction Refinance Loan may be able to reduce the rate on an existing VA-backed loan, or can make the payments more stable by moving from an adjustable or variable interest rate to a fixed rate.

VA loans come with fees that vary by loan type and veteran status. Veterans using the benefit for the first time on a no-down-payment purchase loan pay a 2.15% fee, for example, while a veteran making a second cash-out refinance loan would pay a 3.3% fee. A full fee table is available through the VA.

Veterans who receive or are eligible for VA disability compensation, Purple Heart recipients and certain others are exempt from fees. Other loans — including joint loans, construction loans and loans to cover the cost of energy-efficient repairs — can also be backed by the VA. Consult your lender for more information.

VA loan eligibility does not expire, though the entitlement can only be used for the borrower’s place of residence (not a rental property). It can be reinstated after the loan is paid off or under other circumstances — another veteran can assume the loan, for instance.

Whether current or former troops are eligible for VA loans depends on how long they served and in which years.

Older veterans qualify for VA loans if they served on active duty for at least 90 days during the following dates:

• Sept. 16, 1940-July 25, 1947
• June 27, 1950-Jan. 31, 1955
• Aug. 5, 1964-May 7, 1975 (begins Feb. 28, 1961 for those who served in Vietnam)

If a person’s service falls outside of those date ranges, they may need 181 continuous days on active duty to qualify. That includes enlisted troops who separated on or before Sept. 7, 1980, and officers who separated on or before Oct. 16, 1981.

If a person’s service came after the above date ranges, they need 24 months of time on active duty — or less for certain discharges.

For loan purposes, VA considers Gulf War service to run Aug. 2, 1990, through the present day. Service members from that time period must have completed 24 months of continuous active duty service to be eligible, or at least 90 days for certain discharge statuses.

Troops who are currently on active duty become eligible for a VA loan after 90 days of service, for as long as they remain active. Eligibility now includes National Guard and reserve members with at least 90 days of active service. Troops discharged for a service-connected disability are eligible, regardless of service length.

If a VA-guaranteed loan becomes delinquent, VA works with the borrower to avoid foreclosure, including providing financial counseling. In some cases, that involves direct intervention with a mortgage loan servicer for the borrower.

In 2024, the VA helped more than 158,000 VA borrowers keep their homes. More information is available at https://www.va.gov/housing-assistance/home-loans/trouble-making-payments/

The first step for service members and veterans seeking a VA-backed loan is to obtain a Certificate of Eligibility, either through the eBenefits site or via their lender.

Those seeking to refinance existing loans should read lenders’ advertising material carefully.

VA and the Consumer Financial Protection Bureau have warned of deceptive lending practices. Among the red flags are aggressive sales tactics; low interest rates with unspecified terms; and promises that borrowers can skip a mortgage payment as part of the new loan — a practice prohibited by VA.

Some veterans have experienced difficulty in using their VA loan benefit, especially in competitive housing markets in which multiple bids are quickly made on the same house. VA officials have said that misperceptions still persist among sellers and agents that VA financing is less desirable than conventional loans.

Those in the industry have recommended that veterans question their real estate agents and lenders about their experience and how often they’ve helped veterans use their VA loan benefit.

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The Department of Veterans Affairs launched a new life insurance program in 2023, called VALife, to expand life insurance options for disabled veterans. Those eligible are veterans age 80 and younger who have a VA service-connected disability rating — even if the rating is 0%.

There’s no time limit to apply for this program after getting the disability rating.

Veterans can get up to $40,000 in whole life insurance coverage, in $10,000 increments, and cash value that starts to add up two years after VA approves their application.

The amount of the monthly premium depends on the veteran’s age when they apply for the insurance as well as the extent of coverage.

The premium will not increase as long as veterans keep the VALife policy. For example, a veteran who is 18 when applying for the policy will pay $43.60 per month for the maximum $40,000 worth of coverage. A veteran who is 41 when applying will pay $91.20 a month for that maximum coverage.

SGLI

Service members automatically receive Servicemembers’ Group Life Insurance coverage of $500,000, although they can elect to decline or reduce that coverage.

Currently about 2 million active duty, reserve and National Guard members are insured under SGLI, and pay a premium of $31 per month for $500,000 worth of coverage, which is deducted from their pay. But that premium will be reduced in spring 2025 to $26 a month. SGLI is group term life insurance. The reduction will be automatic and requires no action to get the new rate.

The rate will change to 5 cents per $1,000 of insurance. The monthly premium includes $1 for Traumatic Injury Protection coverage (TSGLI).

SGLI coverage is offered in increments of $50,000. The monthly premium is the same regardless of the service member’s age or other factors.

If active duty service members want to decline or reduce coverage, they can use the SGLI Online Enrollment System. Reservists with part-time SGLI coverage who want to reduce or decline their coverage should use Form SGLV 8286 and submit it to their personnel office.

For the approximately 870,000 active duty spouses covered under the Family SGLI program, the premiums will also decrease between 11% and 22%, depending on the spouse’s age, with an average discount of 13%.

Dependent children are provided $10,000 worth of coverage, at no cost.

VGLI

Veterans who have insurance under the Veterans’ Group Life Insurance, or VGLI, program, will also see a decrease in their premiums in the spring. The premiums will be reduced by between 2% to 17%, depending on the age of the veteran. The average decrease will be about 11%. About 450,000 veterans are insured under VGLI.

There are certain time limits for purchasing VGLI policies after leaving the service, so troops need to do some cost comparisons before hanging up their uniform. SGLI coverage doesn’t automatically carry over, and VGLI is more expensive than SGLI.

More information about VA life insurance options is available at https://www.va.gov/life-insurance/options-eligibility/

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It’s once again tax season. With deadlines fast approaching and stress mounting, here are some helpful tips to help you navigate the season.

Active duty service members have the option to enroll in a new tax-saving benefit, which became available March 3, that could help defray their health care expenses.

A special enrollment period for the new health care flexible spending accounts will run from March 3 through March 31.

In essence, a health care FSA is a savings account that can be used to pay for items not covered by health or dental insurance. Such accounts have been available for years to employees of many federal agencies and private companies.

Service members can contribute any amount between $100 and $3,300 in pretax earnings toward eligible out-of-pocket health care expenses. The Internal Revenue Service determines eligible expenses and contribution limits, the latter of which may vary by tax year.

To enroll, troops should visit fsafeds.gov, select “Qualifying Life Event” from the “enroll” drop down menu, then choose the QLE titled “Special Enrollment Period for Members of the Uniformed Services March 3-31.”

By contributing to FSAs, taxable income decreases by the contribution amount. Savings depend on a variety of factors, such as how much the service member contributes to the account, and the individual or household tax situation.

If the service member and spouse are both eligible to enroll in a health care flexible spending account through their employers and maintain two separate accounts, the household can contribute between $200 and $6,600 per year. The benefit is administered by the Federal Flexible Spending Account Program, or FSAFEDS, which is sponsored by the Office of Personnel Management.

The health care FSAs will be available to members of the active component and reservists performing Active Guard and Reserve duty. Members of the U.S. Coast Guard Reserve who are on active duty for more than 180 days — including reserve component managers — are also eligible.

Defense officials began offering service members flexible spending accounts for dependent care in 2024, which helps defray the cost of child care. Service members have until April 30, 2025, as a grace period to submit claims for child care expenses they incurred through Dec. 31, 2024.

After this special enrollment period, the yearly enrollment for the FSAFEDS will be mid-November to mid-December of each year.

About those 2024 taxes

These health care flexible spending accounts will help defray costs in 2025, but right now is also the time to get those taxes filed for 2024 — with just a few weeks remaining before the April 15 Internal Revenue Service tax filing deadline.

If you’re in the military or a military spouse, there’s no need to pay a tax preparer for military-specific tax help. Free tax software is offered through Military OneSource’s MilTax resources, which are attuned to unique military benefits and needs. You can file federal and up to three state tax returns through this software.

In addition, service members and family members have access to military tax consultants with special training in military-specific situations through Military OneSource.

The fastest and most reliable way for service members to file their taxes is electronically and to choose direct deposit if they’re expecting a refund, according to Susan Mitchell, executive director of the Armed Forces Tax Council, who recently conducted a webinar for service providers and financial counselors who work with military families.

Additionally, some installations in the U.S. operate Volunteer Income Tax Assistance (VITA) centers where you can go to get in-person tax preparation help.

Check with your military legal assistance office to see if they offer the service, and check with the Military OneSource locator. These locations have Internal Revenue Service-certified volunteers who are also trained in military-specific tax regulations.

The basics

All Defense Department tax statements, including W-2 statements, are available through the military’s myPay site — https://mypay.dfas.mil/.

There are longstanding tax filing extensions available for certain service members. While the federal tax filing deadline this year is April 15, troops stationed outside the United States and Puerto Rico can qualify for an automatic two-month extension until June 15.

That extension is designed to help troops who may have trouble getting all the documents they need. According to the IRS, even if you are allowed an extension, you will have to pay interest on any tax not paid by the regular due date of your return.

Those overseas who are unable to file by June 15 can request an additional extension to Oct. 15. But remember, any taxes due must be paid or you could be subject to both interest charges and a failure-to-pay penalty.

Tax filing deadlines for service members deployed to combat zones are extended for the period of their service in the combat zone, plus 180 days after their last day in the combat zone.

Most allowances service members receive aren’t taxable, such as the Basic Allowance for Housing and the Basic Allowance for Subsistence. But there are exceptions, such as the Basic Needs Allowance, which is taxable.

When service members are serving in a combat zone, their income for that month is generally tax-free; service outside the combat zone may also qualify when in direct support. Combat zones, meanwhile, are designated by executive order.

This year, service members in designated disaster areas should check to see whether filing extensions apply to them. For example, deadlines are extended for taxpayers affected by hurricanes Helene and Milton, and by the the wildfires in California.

Check the IRS page on disaster relief situations for more information.

Tax brackets: There are still seven tax rates for 2023, but the income levels have shifted to account for inflation. For example, single service members with taxable income ranging from $47,151 to $100,525 would be in the 22% tax bracket. Married couples filing jointly with taxable income from $94,301 to $201,050 would also be in the 22% tax bracket. For more information visit the IRS tax rates page.

Standard deductions: After adjusting for inflation, the standard deduction is now $14,600 for single filers and for married couples filing separately; $21,900 for single heads of household who are generally unmarried with one or more dependents; and $29,200 for married couples filing jointly.

Itemizing deductions: There are people who have enough tax deductible expenses that they may benefit from itemizing. The deduction for state and local income taxes, property taxes and real estate taxes is still capped at $10,000. The mortgage interest deduction is limited to $750,000 of indebtedness. Those who had $1 million of home mortgage debt before Dec. 16, 2017, will still be able to deduct the interest on that loan.

Only unreimbursed medical expenses that exceed 7.5% of the adjusted gross income can be deducted.

For charitable donations in 2024, the annual income tax deduction limits for gifts to public charities are 30% of adjusted gross income for non-cash assets, and 60% of AGI for contributions that are made in cash.

Earned Income Tax Credit

The Earned Income Tax Credit applies to eligible low- and moderate-income workers, subject to certain qualifying rules. You may qualify for the EITC even if you can’t claim children on your tax return. 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 for those who are stationed outside the United States. For more information, visit the IRS page on the EITC for military members.

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 $66,819 or more with three or more children. The maximum EITC for that group is $7,830.

EITC helps lower-income taxpayers reduce the amount of tax that’s owed, on a dollar-for-dollar basis. A refundable credit means a taxpayer could be eligible for a refund even if they have no tax liability for the year.

That’s typically better than a deduction, which reduces the amount of your income that is subject to tax.

Child and dependent credits

Child tax credit: For tax year 2024, the child tax credit is $2,000 per child, if the child was under age 17 at the end of 2024. It’s also subject to phase out as income rises, starting at $400,000 for joint filers and $200,000 for single filers. For other qualified dependents you can claim a $500 credit.

Child and dependent care credit: 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 — and your spouse, if filing a joint return — 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, to learn more about exceptions to the rule, see “What’s Your Filing Status?” in IRS Publication 503, Child and Dependent Care Expenses.

For 2024, the amount of the credit is a percentage of the child care expenses up to $3,000 per child — with a maximum of $6,000 for two or more children — paid to a daycare provider for dependent children under the age of 13, or for a disabled dependent. There is no age limit for a disabled dependent.

The more you earn, the less the percentage of employment-related child care 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.

Education credits

The American Opportunity Tax Credit is a partially refundable credit that pays education expenses for students in the first four years of college. Service members can claim up to $2,500 per student, and if the credit brings the tax bill to zero, you can have 40% — or up to $1,000 — refunded.

The Lifetime Learning Credit covers up to $2,000 in qualified education expenses per tax return. It can be used for expenses related to all kinds of educational opportunities, from degree programs to technical classes. You can claim both the AOTC and the LLC on a return, but you can’t claim both for the same student or the same expense.

Student loan interest deduction: You may deduct the lesser of $2,500 or the amount of interest actually paid during the year. Income limits have increased. For joint filers, for example, the phaseout for eligibility for the deduction begins at a modified adjusted gross income of over $165,000.

Educational assistance from an employer: You can exclude up to $5,250 of those benefits from taxes.

Changes to form 1099K

The IRS is treating the 2024 tax year as a continued transitional period regarding reporting transactions involving payment apps such as PayPal and Venmo. For 2024, the 1099K forms are required for people receiving $5,000 or more, regardless of the number of transactions. Previously, the threshold was $20,000 for reporting, with the number of transactions exceeding 200.

The American Rescue Plan Act of 2021 changed the rules to require reporting for taxpayers who received $600 or more in the year, but feedback from taxpayers and payment processors who were confused by the new rules led the IRS to delay the $600 new reporting threshold requirement, Mitchell said.

For tax year 2025, the third-party payment processors will report transactions of $2,500 or more on form 1099K, as the final transition period.

Also notable

Adoption of a child: Taxpayers can receive a credit for up to $16,810 of qualified expenses. The full credit is available for a qualified special needs adoption, even if it costs less. For joint filers with a modified adjusted gross income of over $252,150, the credit begins to phase out.

Educators’ deductions: A number of military spouses are teachers, and they can deduct up to $300 of out-of-pocket expenses for supplies, books and other classroom materials. This deduction can be claimed even by those who take the standard deduction. Those eligible include anyone who is a teacher, counselor, principal, aide or other educator in public or private schools, who has worked at least 900 hours in the school year.

Unreimbursed moving expenses: Service members can deduct unreimbursed moving expenses related to Permanent Change of Station moves. You can’t deduct for any services provided by the government or reimbursed by the government. But while DOD covers many expenses, there still may be some that aren’t reimbursed. Use IRS Form 3903 to deduct those.

Transportation and parking: Monthly limits for the tax-free qualified benefits increased to $315 in 2024, up from $300 in 2023.

Standard mileage rates: The military move mileage rate is 21 cents per mile. Business mileage increased to 67 cents per mile, and medical mileage is 21 cents per mile.

Capital gains taxes for military homeowners: Military homeowners get an extra benefit when it comes to tax exclusions of profit from the sale of their residence. Generally, taxpayers avoid paying capital gains taxes on the sale of their home as long as they’ve owned it and used it as their qualifying principal residence for at least two of the five years preceding the sale. The amount of profit that can be excluded from taxes is $250,000 for single taxpayers, and $500,000 for married couples filing jointly. But military taxpayers can extend that qualifying time period by up to 10 years, for a total of up to 15 years, if they’re assigned to a duty station that’s at least 50 miles from the house for a period of 90 days or more.

“Nanny tax” threshold: If you hired a nanny or other household employee and paid at least $2,700 in wages in 2024, you were responsible for withholding taxes from their pay and then paying taxes of your own.

“Kiddie tax” takes less of a bite, with income limits increasing. The first $1,300 of a child’s unearned income — such as interest and dividends — is tax free for those 18 or younger, or if the child is a full-time student under age 24. The next $1,300 is taxed at the child’s rate. Any excess over $2,600 is taxed at the parent’s rate.

Energy credits: If you installed qualifying exterior windows, doors, skylights or insulation materials, or purchased a qualifying new furnace, hot water heater or central air conditioning unit, you may be eligible for a tax break of up to $1,200 per taxpayer per year, with a $600 limit per item on most types of property. There’s a higher credit of up to $2,000 for a separate category of heat pumps, water heaters and biomass fuel stoves.

If you installed equipment such as solar panels or solar water heaters, you could get a residential clean energy credit valued at 30% of your qualifying expenses.

Those who purchased a used electric vehicle or used fuel cell vehicle from a licensed dealer for $25,000 or less may qualify for a clean vehicle credit of 30% of the sale price, up to a maximum credit of $4,000. There are income limits. For example, your modified adjusted gross income must not exceed $150,000 for married couples filing jointly.

If you bought a new electric vehicle or fuel cell vehicle, that credit is $7,500, if all eligibility requirements are met. For example, the modified adjusted gross income must not exceed $300,000 for joint filers. (See the IRS checklist for more information on eligibility requirements.)

Tips and cautions

Those in the military community aren’t immune from making the common mistakes made by those in the general public. That includes entering wrong Social Security numbers, making math mistakes or omitting income documents that an employer has already reported as income to the IRS.

Mitchell, the executive director of the Armed Forces Tax Council, recommends using electronic software because it performs the more complex calculations and catches any math errors that might happen when filing a paper return. Always use the same names exactly as they appear on your Social Security card, and always double-check to make sure your bank account numbers are correct.

Print a paper copy of your electronic return and review it for possible errors.

• Getting a refund? Check the status of your refund at the IRS web page, “Where’s My Refund?”
• Didn’t receive a tax document? Contact the employer or issuing agency. If they can’t get a copy, contact the IRS for help at 800-829-1040. After you provide your information and your employer’s information, the IRS will contact the employer, but will also send you a substitute form to report the information that’s on the missing document. If the employer sends a document later with different information, the taxpayer may need to file an amended return.

It bears repeating: If you feel comfortable doing your taxes online at home, look into the free MilTax software, and remember you have trained tax consultants available by chat or phone through the MilTax resources of Military OneSource. You may be able to go to a Volunteer Income Tax Assistance site at an installation nearby or qualify for assistance at a VITA location in the civilian community.

Before you sign agreements with other tax preparers who charge fees, make sure you have clear information about the fees involved and any fees involved in their extra services.

It’s against the law for these tax preparers who offer “refund anticipation loans” to charge interest of more than 36% annual percentage rate to active duty members and their families, and fees are calculated into that rate.

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The 9.6 million Tricare beneficiaries have seen changes in the Department of Defense health care program, with new Tricare contracts that were implemented starting on Jan. 1, 2025. The new contractor for the West Region is TriWest Healthcare Alliance. The incumbent contractor for the East Region, Humana Government Business, has continued in that role.

An additional 1.5 million beneficiaries were transferred to the West Region from six states in the East Region: Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin. The West Region now covers 26 states.

The new contracts are designed to bring improvements for beneficiaries, according to defense health officials, such as more efficient health care referral transfers between the two regions; greater provider network flexibility; improved beneficiary choice; and enhanced telehealth appointments.

However, as of March 1, Tricare beneficiaries and medical providers in both regions were still having widespread problems, affecting beneficiaries’ access to the health care they need. Defense Health Agency and the Tricare contractors have been working to fix the problems.

Meanwhile, after years of forcing some military beneficiaries to seek medical care in the Tricare private sector network, the Defense Department wants to attract patients back to military treatment facilities.

Citing problems that have led to “chronically understaffed military treatment facilities and dental treatment facilities,” then-Deputy Secretary of Defense Kathleen Hicks in 2024 directed sweeping changes to boost staffing at medical facilities and increase access to care for beneficiaries.

Hicks laid out a plan to grow the number of patients who receive care in a military treatment facility by 7% by the end of 2026, compared to the number of beneficiaries in December 2022. That would mean 3.3 million people would be using the MTFs in three years, according to calculations.

For example, officials are conducting a comprehensive review of all medical manpower and staffing; and plan to shuffle medical personnel to boost capacity at some locations.

Beneficiaries’ increased costs in 2025

Some military families saw a rise in their health care costs in 2025. Active duty service members don’t have any out-of-pocket costs.

Generally, those who have been paying out-of-pocket for health care under Tricare in 2024 will pay extra in 2025, according to fee schedules released by the Defense Health Agency. For those who make co-payments for covered services such as primary care visits, specialty care outpatient visits and emergency room visits, some co-pays will go up by $1 to $3 a visit.

Family members may have costs, depending on the Tricare health plan they are enrolled in, their sponsor’s pay grade and when the sponsor entered active duty, the type of care they get and where they get it.

There are no costs for covered preventive care visits.

Those who pay annual enrollment fees will also see increases. For example, retirees who entered the military before 2018 will pay $744 to enroll their family in Tricare Prime, up from $726 in 2024.

Annual deductibles will increase for some, which means the families will pay more out of pocket before Tricare kicks in. For example, active duty families in Tricare Select whose service member is E-4 and below and entered the military on or after Jan. 1, 2018, will pay $128 out of pocket before Tricare kicks in, an increase of $3 compared to 2024.

Pharmacy costs did not increase in 2025 for Tricare beneficiaries who get their prescriptions filled at a retail pharmacy or through the mail-order program. There aren’t co-payments for prescriptions filled at military pharmacies. In February, 2025, Kroger rejoined the Tricare retail pharmacy network.

Active duty members pay nothing for their covered medications through military pharmacies, retail pharmacies in the Tricare network and through the home delivery benefit. The military pharmacy is still the lowest cost option for all military beneficiaries, because there’s no cost for covered generic and brand-name drugs at these pharmacies.

Under the Tricare Pharmacy Home Delivery policy, those enrolled in the automatic refill program must approve each refill so that they only receive the medications they need. Express Scripts, the administrator of the program, will let them know by phone, email or text that they have a refill coming up. Enrollees will then log into their account to confirm the prescription.

Tricare expanded the telehealth program during the pandemic to make it easier for military beneficiaries to get care. It now covers telehealth visits over the phone as a permanent benefit. While there was a temporary waiver on patient costs for telehealth during the pandemic, patients now pay cost-shares and co-pays. Telehealth costs are similar to costs for in-person care.

Tricare also covers the use of secure video conferencing to provide medically necessary services, allowing patients to connect with a provider using a computer or smartphone.

Who’s eligible?

Tricare offers 11 different options, with choices depending on the status of the military sponsor and the geographic location.

It is open to active duty members; military retirees; National Guard and reserve members; spouses and children registered in the Defense Enrollment Eligibility Reporting System; and certain others, including some former military spouses and survivors, as well as Medal of Honor recipients and their immediate families.

Those entering the military or changing status — for example, from active duty to retired — should make sure they and their eligible family members are enrolled in the Tricare program of their choice. Those who do not enroll may only receive care at a military clinic or hospital on a space-available basis; medical care by civilian providers would not be covered.

The one-month open season begins on the Monday of the second full week in November. During that time, you can enroll in a new Tricare Prime or Tricare Select plan or change your enrollment. If you’re satisfied with your current Tricare health plan you don’t have to take action.

By law, there’s a strict limitation on switching Tricare plans outside of open season. The exception to that rule is if there is a qualifying life event, such as the birth or adoption of a child, a move to a new duty station, a marriage or retirement. Open season does not apply to active duty members, who have full health coverage, or to retirees who are in Tricare for Life.

Tricare beneficiaries fall into one of two categories set by law:

• Group A: Sponsors who entered the military before Jan. 1, 2018, and their dependents;
• Group B: Sponsors who entered the military on or after Jan 1, 2018, and their dependents.
  

Those in Group A and Group B have different enrollment fees and out-of-pocket costs.

Families of active duty, National Guard and reserve service members — as well as Guardsmen and reservists who aren’t on active duty — are eligible for the Tricare Dental Program, which requires separate enrollment.

Most retirees and their family members are eligible for dental and vision coverage under the Federal Employees Dental and Vision Insurance Program, or FEDVIP, which is administered by the Office of Personnel Management and also requires separate enrollment.

What are the options?

Tricare offers two core health care options: Tricare Prime and Tricare Select.

All active duty members are required to enroll in Tricare Prime; they pay nothing out of pocket. Active duty families can also enroll in Tricare Prime without an enrollment fee.

Prime beneficiaries are assigned a primary care manager, or PCM, at their local military treatment facility, or, if one is not available, they can select a PCM within the Tricare Prime civilian network. Specialty care is provided on referral by the PCM, either to specialists at a military facility or a civilian provider.

Tricare Select is similar to a traditional fee-for-service health plan. Patients can see any authorized provider they choose, but must pay a deductible and co-pays for visits. Patients pay lower out-of-pocket costs when they receive care from a provider within the Tricare network.

All Tricare programs have a cap on how much a family pays out of pocket each fiscal year, depending on the sponsor’s status and the type of Tricare program used.

The plans

Tricare Prime. Similar to a health maintenance organization, Tricare Prime has lower out-of-pocket costs but requires enrollees to use network providers and coordinate care through a primary care manager — a doctor, nurse practitioner or medical team.

It’s free to active duty members. Families enrolled in a Tricare Prime plan do not have to pay enrollment fees or co-payments unless they use the point-of-service option or fill a prescription outside of a military pharmacy. Retirees must pay an annual enrollment fee. Co-payments for medical visits are lower than other programs.

Tricare Prime Remote. Service members who live and work more than 50 miles or an hour’s drive from the nearest military treatment facility must enroll in Tricare Prime Remote. Family members are eligible if they live with an enrolled service member in a qualifying location, or they may use Tricare Select.

Tricare Prime Overseas. This is a managed-care option for active duty members and their command-sponsored family members in nonremote locations. They have assigned primary care managers at a military treatment facility who provide most care and referrals for and coordination of specialty care.

Tricare Prime Remote Overseas is a managed care option in designated remote overseas locations, with most care from an assigned primary care manager in the local provider network who provides referrals for specialty care. Activated National Guard and reserve members and their families may also enroll in these options while the sponsor is on active duty. Retirees and their families are not eligible.

Tricare Select. This is a preferred provider plan — authorized doctors, hospitals and other providers are paid a Tricare-allowable charge for each service performed. Costs are higher for out-of-network providers, and certain procedures require pre-authorization.

There is no enrollment fee for active duty families. Group A working age retirees are required to pay monthly enrollment fees. Co-pays vary by status and type of care.

Tricare Reserve Select. Qualified Selected Reserve members can buy Tricare coverage when they are in drilling status — not mobilized. The program offers coverage similar to Tricare Select.

Tricare Retired Reserve. “Gray area” National Guard and reserve retirees who have accumulated enough service to qualify for military retirement benefits but have not reached the age at which they can begin drawing those benefits (usually age 60) can purchase this insurance, which offers coverage similar to Tricare Select.

Tricare for Life. This wraparound program is for retirees and family members who are eligible for Tricare and Medicare. The provider files the claims with Medicare; Medicare pays its portion and then sends the claim to the Tricare for Life claims processor. Enrollees must enroll in Medicare Part A — free for those who paid Medicare taxes while working — and Part B — monthly premium required — to receive Tricare for Life.

Tricare Young Adult. Unmarried dependent children who do not have private health insurance through an employer may remain in Tricare until age 26 under a parent’s coverage via TYA Select or TYA Prime. Premiums are required for both.

U.S. Family Health Plan. Beneficiaries who live in one of six designated areas can enroll in this as a Prime option. Those enrolled get all their care, including prescription drugs, from a primary care provider that the beneficiary selects out of a network of private doctors affiliated with one of the not-for-profit health care systems in the plan.

Beneficiaries do not get care at military hospitals or clinics, or from Tricare network providers when enrolled in the U.S. Family Health Plan.

Action items

Beneficiaries enroll in a Tricare plan in order to be covered for civilian health care. Those who don’t enroll will only be able to get health care at a military clinic or hospital on a space-available basis.

To be eligible for any of the Tricare plans, beneficiaries must first be enrolled in the Defense Enrollment Eligibility Reporting System.

Active duty members are automatically registered in DEERS when they join the military, but they must register eligible dependent family members.

Service members should make sure the information is correct for their family members. Only military members can add or remove family members. This can be done through the local ID card office.

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Two benefits that continue to help those in the military community stretch their dollars are commissaries and exchanges.

Commissaries are considered on-base stores that sell discounted groceries to authorized customers, while exchanges are on-base stores — with an online component — that sell a variety of items, including clothing and shoes, toys, furniture, home appliances and electronics. They have on-base gas stations and stores that sell alcoholic beverages.

Over the past few years, eligibility to shop at military commissaries and exchanges has expanded to include more people in the military community.

As always, it pays to compare prices between military stores and other stores.

Commissaries

Those eligible to use the commissary benefit include active duty, Guard and reserve members, military retirees, Medal of Honor recipients and their authorized family members. These shoppers have IDs issued by the Defense Department.

In a recent change, commissary employees can also shop, but not their family members. DOD and Coast Guard civilian employees in the U.S. and on service agreements overseas are among the authorized shoppers as well.

In 2020, eligibility was expanded to veterans with service-connected disabilities, Purple Heart recipients, former prisoners of war and primary family caregivers of eligible veterans enrolled under the VA’s Program of Comprehensive Assistance for Family Caregivers.

Eligible veterans use their veterans health ID card, or VHIC, to gain access to the installation and to shop. Spouses and other family members aren’t allowed to shop individually, but are allowed to come into the stores with the veteran. Family caregivers who qualify for the benefit will have access to a memo at VA.gov that will be used for entry, along with a driver’s license, passport or other authorized form of ID.

Payments accepted include cash; personal checks; travelers checks; money orders; debit cards; Military Star Card; American Express, MasterCard, Visa and Discover credit cards; Temporary Assistance to Needy Families (TANF); Supplemental Nutrition Assistance Program; Women, Infants and Children (WIC) Program; American Red Cross Disbursing Orders; commissary gift cards; and coupons.

In an effort to help service members and families deal with rising food costs, the Defense Department has invested in commissaries to decrease the price of most grocery items by about 3% to 5%.

These discounts are particularly focused on food staples like bread, milk, eggs and other items. The goal is to maintain an average worldwide savings of at least 25% when compared to stores outside the gate. Before the extra funding, there was an overall, average savings of 22%. Customers also pay a 5% surcharge which is used to cover construction costs and other needs.

Officials have taken other steps to boost the benefit, such as expanding hours of operation. That includes 56 stores that have converted from six- to seven-day operations.

The commissary agency provides a Click2Go program at all commissaries worldwide, where customers choose their items online, select a pickup time and at the appointed time head to the Click2Go parking spaces, where commissary employees bring their groceries to their car and finish the transaction. Commissary officials have also been testing the idea of doorstep delivery.

A limited number of commissaries sell beer and wine. Commissaries do sell tobacco in stores on Army and Air Force bases. DOD policy is that tobacco can’t be sold at a discount greater than 5% below the lowest competitor in the local area.

Rules on who can use overseas commissaries are affected by status-of-forces agreements between host nations and the U.S.

Situations vary by country, and individuals should check with the local U.S. military command or installation they plan to visit before they travel.

Most commissaries have evening and weekend hours.

To find a store, and get information such as hours and directions, visit the commissary website and click on “Store Locator.”

Exchanges

Exchanges are the military’s version of department stores, selling discounted brand-name goods from civilian companies, as well as their own private label items. There is no sales tax.

There are four exchange systems: The Navy Exchange Service Command; the Marine Corps Exchange system; Coast Guard Exchange system; and Army and Air Force Exchange Service, also known as The Exchange or AAFES.

Eligible exchange shoppers can shop at any of the stores, regardless of service branch, including their online stores.

Stores support themselves almost completely through their sales income. All profits are used to fund military Morale, Welfare and Recreation programs, and to build or renovate stores.

Eligible shoppers include all ranks of active duty, National Guard and reserve members and their families; Medal of Honor recipients and their families; surviving spouses and former spouses; DOD and Coast Guard civilians; veterans with VA service-connected disability ratings; Purple Heart recipients; veterans who are former prisoners of war; and primary family caregivers of eligible veterans under the VA caregiver program.

All honorably discharged veterans can shop online at the exchanges. The Veterans Online Shopping Benefit does not grant on-installation access, unless the veteran falls into another category, such as having a VA service-connected disability rating.

Overseas stores offer many U.S. products that may be difficult to find otherwise, but commands often impose shopping restrictions to limit the sale of U.S. goods on the illegal market.

Stateside and overseas exchanges accept major credit cards, and also offer their own credit plan through the joint-exchange Military STAR Card.

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Military families have many of the same needs as their civilian counterparts, but problems such as spouse unemployment and lack of child care are often exacerbated by frequent moves and deployments that come with military life.

DOD and service officials have been working to improve quality of life for those families, especially by tackling spouse unemployment and child care shortages.

Bases worldwide offer families a wide variety of support services, from legal assistance and tax preparation to education and employment assistance, financial counseling, relocation assistance and much more.

To find out more about what’s available, start with the family centers on military installations or MilitaryOneSource.mil, which offers additional assistance by phone or chat, 24 hours a day.

Most of the information on Military OneSource is available to the public, but some extra services are available for free to service members and their immediate family members, survivors of deceased service members and certain others. Retiring or separating service members and their immediate family members can also use these services for one year after they leave the service.

Among those services are non-medical counseling — available in person, by phone, secure chat or video session — as well as financial counseling, including free tax preparation and tax filing help.

Spouse employment and education services, language translation services for documents, health and wellness coaching, child/youth behavioral counseling and family life counseling are also available.

Spouse employment and education

Spouses can visit their installation’s family center for employment and education assistance. They can also visit the Spouse Education and Career Opportunities, or SECO, section at MilitaryOneSource.mil for information about scholarships and other education and employment needs. SECO offers a free, personalized benefit through certified career counselors to help spouses investigate career options, education options or entrepreneurial projects.

Through DOD’s My Career Advancement Account program, or MyCAA, spouses of certain service members can receive tuition assistance of up to $4,000, with an annual cap of $2,000, to pursue licenses, certifications or associate degrees needed for employment in any career field or occupation. Spouses may also use their MyCAA scholarship at an approved institution to help with the costs of national tests for course credits required for a degree approved under the MyCAA program.

This benefit was expanded to include more spouses, and is now available to spouses of active duty members at the grades of E-1 to E-9, W-1 to W-3, and O-1 to O-3.

Spouses married to members of the National Guard and reserves in the same pay grades are also eligible. Spouses can check their eligibility by visiting the MyCAA scholarship website and applying for an account. Military spouses remain eligible for this financial assistance if their military sponsor is promoted beyond the eligible ranks, as long as they already have an approved education-and-training plan in place through the program.

Spouses can also search job opportunities on the Military Spouse Employment Partnership site, where hundreds of employers, vetted by the Defense Department, are looking to hire military spouses.

More than 950 employers are MSEP partners. As the number has grown over the past decade, those employers have hired more than 360,000 military spouses across every employment sector, according to DOD. A number of these employers have remote work opportunities. In addition, through Military OneSource, spouses can get a free one-year membership to FlexJobs, a career platform that specializes in flexible and remote job openings.

Many military spouses spend time and money getting new professional licenses when they move to a new state. It costs money to sit for exams, plus other fees and the potential of lost pay as they go through the relicensing process. To help with these expenses, the law allows service members to apply to their service branch for reimbursement of up to $1,000 for their spouse’s relicensing and recertification costs each time they relocate on military orders. This also applies to reimbursement for certain business costs.

The Department of Labor offers information about state professional licensing requirements, specifically for military spouses.

A paid fellowship program allows spouses to be placed with civilian companies seeking full-time employees. The Military Spouse Career Accelerator Pilot Program is free to employers, and DOD will pay spouses during their 12-week fellowships. The program is entering its third year; placing more than 900 spouses into fellowships as of January 2025.

The accelerator pilot is open to spouses of currently serving members of the Army, Navy, Marine Corps, Air Force and Space Force, to include the active, reserve and National Guard components. The hope is that companies will hire the spouses at the end of their 12-week fellowships. To date, about 80% of participants have been offered full-time employment with their host companies.

Spouses interested in applying can visit the Military OneSource Spouse Education and Career Opportunities accelerator pilot page.

Companies interested in hosting a military spouse fellow can learn more and sign up through the Hiring Our Heroes website page for employers.The fellowship program is administered by the U.S. Chamber of Commerce Foundation.

Child care

The Defense Department’s child care systems include more than 700 child development centers, facilities for school-age children and a number of family child care homes at more than 230 locations worldwide. All are required to adhere to DOD regulations. These programs are nationally recognized for their quality, and programs meet strict standards for curriculum, safety and health.

There has long been a shortage of affordable, high-quality child care for military families, just as there is a shortage nationwide. Although the military is building more child development centers, officials argue the problem can’t be solved by construction alone and have launched various initiatives, like staffing incentives, to ease the care crunch.

Child care fees are set on a sliding scale based on total family income, to include spouse income and other sources, and are the same regardless of a child’s age. For example, the standard fee is $54 a week for a family with a total family income of $45,001 or less.

Families can learn more about the child care options offered at or near their installation at the official DOD website, MilitaryChildCare.com. The website gives parents more visibility into the available child care slots at multiple installations in a given area, and allows them to register and apply for child care in advance. Families can submit unlimited requests for child care and remain on waitlists for a preferred program even after being offered care elsewhere.

Working military families receive higher priority in child care programs under DOD policy. The policy also allows officials to displace children who are already in a child development program if their parents are in a lower-priority category, and the gaining family expects to be on a wait list for more than 45 days after the time they need care.

Military families may also find child care through family-run sites in on-base homes, which undergo rigorous certification, inspection and oversight. Any family-run child care provider on an installation who offers child care for other families’ kids for at least 10 hours a week must be certified through installation officials. Families can get lists of certified home day cares at their installation’s child development program office, and on the MilitaryChildCare.com website.

Military families can also find high-quality, subsidized child care in their local civilian community if care is not available on base. Families must register at the MilitaryChildCare.com website for fee assistance through the program, operated through the nonprofit Child Care Aware of America.

In another option for finding hourly and on-demand child care, families can receive a paid subscription to a service that lets them search for child care providers through Military OneSource. DOD covers the cost of the subscription.

In the past few years, Congress has authorized funding to build more child development centers — 16 in fiscal 2023, and nine in the fiscal 2024 defense policy law. It generally takes about five years to finish construction and open the facilities.

The Pentagon and the services are looking at new ways to ease the child care shortage, such as streamlining the hiring process for new staff and offering workers better pay and benefits. Officials argue staffing shortages are a major factor in the scarcity of child care facilities.

Congress has also approved a DOD pilot program that provides fee assistance for in-home child care. It’s currently available in 12 regions, with limited spaces available. Find more information at MilitaryChildCare.com.

Tax-savings accounts for child care

To help ease the cost of child care for military families, DOD began offering the dependent care flexible spending account program for calendar year 2024. Service members for the first time could opt to have part of their pay set aside in a spending account to reimburse eligible expenses.

Active duty members and Active Guard Reserve members on Title 10 orders who pay for the care of an eligible dependent may use the benefit. Eligible dependents include children under age 13, or dependents of any age if they are physically or mentally incapable of caring for themselves.

This is a pre-tax benefit account used to help pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs and child or adult day care. Married couples filing joint tax returns can set aside $100 to $5,000 to help pay for those expenses. Since it’s deducted from pay and put into the account before taxes, it reduces the overall tax burden. Claims can be submitted for dependent care expenses to be reimbursed from that account.

You can enroll online through the Federal Flexible Spending Account Program, known as FSAFEDS, sponsored by the Office of Personnel Management.

Enrollment is available only during the annual Federal Benefits Open Season — mid-November through mid-December — or when experiencing a qualifying life event such as the birth or adoption of a child.

Schools for military children

In the fall of 2024, the Department of Defense Education Activity opened universal pre-kindergarten classes for 4-year-olds at 80 of its primary schools on bases around the world. The remaining 10 primary schools in the DODEA system will get pre-K over the next several years, pending construction and renovation.

Once pre-K classes have arrived in all 90 primary schools, an estimated 6,000 4-year-olds will be eligible. Any child who will be age 4 on or before Sept. 1 of a coming school year may enroll.

The first schools for military children were established by the Army overseas after World War II, about 75 years ago. Now, DODEA operates 161 accredited schools in 9 districts located in 11 foreign countries, seven states, Guam and Puerto Rico, serving more than 67,000 children of active duty military and DOD civilian families.

Students at these DOD schools continued to score at the top of the nation in 4th and 8th grade math and reading scores, according to results released Jan. 29.

The average scores of students in Department of Defense Education Activity schools ranged from 14 to 25 points higher than the national averages in math and reading in the two grades of students who took the National Assessment of Educational Progress tests. DODEA students were ranked at the top of the states in each of the tests.

More active-duty military parents will soon be able to enroll their children in DOD schools operated on bases in the contiguous United States — even if they live off base. A new law will allow full-time, active duty service members assigned to specific installations to request that their children be enrolled in the school operated by the DOD, regardless of whether they live on base. Children may be allowed to attend the school if space is available.

The change will apply only to families at certain bases. In the coming months, service officials and officials with the Department of Defense Education Activity will decide which bases will participate in the new program.

The program ends the blanket requirement that students must live on the installation to qualify for attendance at these schools, which are generally valued by military families for their academic achievement scores and programs for military children.