USAF Pilot Bonus & Tax Free

[Huggyu2]

Anyone out there in "the know"?: if I was deployed to a tax-free zone (Middle East) the month I received my annual pilot bonus, can I get some of it considered tax free?

 

[dtfl]

Check with Finance. I think so - I let some Enlisted folk re-up (and therefore get a reenlistment bonus) in my AC while over a Tax Free area and they did get the entire 10-15k tax free.
One problem I have seen is - they credit me for my tax free pay and the other "pays" don't catch up until a month or two later, and they SHOULD be tax free, but since they are paid in a normal paycheck, which isn't received in a tax free zone...I got taxed.
Before you go - go to Finance!! From what I have seen yes.

 

[Skyrunner]

I think the rule is that you can only receive tax free up to the amount of an E-9. If your life is anything like a Herc pilot, you max out on tax free pay midway through the year. A tax free bonus would only help you if you were flying a desk on some staff and rarely entered a tax free area. This could all be wrong. Just coming off the top of my head.

See ya,

SR

 

[dtfl]

Skyrunner - good point. Possibly part of it then. I am sure the Es that reenlisted got their ENTIRE bonus, but this situation entails a monthly or quarterly check. Might get hit with that limit.

 

[Kikuchiyo]

Here's the deal. Enlisted personnel receive all of their pay and bonuses tax freee when in a combat zone.

Officers are different. O's may receive any pay and bonuses in a given month tax free, BUT only up to the maximum base pay that the Chief Master Sgt of the AF could earn in a month. (Technically plus the hostile fire pay, $225) Check the base pay scales for the top right corner of the E scales for the current max. Then, whatever your base pay is less than that is how much of your bonus you will get tax free. The rest of the bonus is taxable.

If you're a Major or Lt Col, you're probably already earning about what the CMSAF makes, so you get little to nothing of your bonus tax free. And, if you're making more than the CMSAF monthly, then you're not getting a full tax-free month when you go downrange, only up to what he would earn, with the left over amount taxed.

During Vietnam the rule was that O's only got $500 of their income tax-free. That was based on how much E's earned back then. The rule wasn't changed until after Gulf War I to reflect current pay scales, and it was set up to change as pay scales change rather than as a fixed dollar figure. Thus the "maximum that the CMSAF earns" rather than saying $4,523.36 or whatever it is.

 

[dog]

This year the max the officers can exempt monthly from federal taxes is $6529 and change. The other place that you can put it (tax free) is in the TSP account if you had elected it to go there. The cap for 2005 is 14K. BTW FICA and medicare get pulled out if you were tax free or not at 6.2 % and 1.45% of your base pay.

 

[Vandal]

Pilot bonus? Is that just flight pay or am I missing something?

 

[Kikuchiyo]

Pilot bonus = the blood money they offer to keep you in AFTER you've completed your initial pilot training commitment. It's not your monthly flight pay.