The combat zone tax exclusion locations fall into three groups: combat zones designated by presidential Executive Order, qualified hazardous duty areas designated by Congress, and direct support areas certified by the Department of Defense. Each group is created by a different legal mechanism under 26 U.S.C. § 112, and the tax treatment attached to each is slightly different.1Office of the Law Revision Counsel. 26 USC 112 – Certain Combat Zone Compensation of Members of the Armed Forces If your deployment location appears on any of the three lists below and the conditions for that list are met, your military pay for any month you set foot there can be excluded from federal income tax.
Presidentially Designated Combat Zones
Three Executive Orders currently define active combat zones. Service in any of these locations qualifies you for the exclusion for every month you spend even one day in the zone, with no requirement that hostile fire or imminent danger pay be authorized.
Arabian Peninsula
Executive Order 12744 has designated the Arabian Peninsula combat zone since January 17, 1991. The land areas covered are Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. The maritime portion covers the Persian Gulf, the Red Sea, the Gulf of Oman, the Gulf of Aden, and the part of the Arabian Sea north of 10 degrees north latitude and west of 68 degrees east longitude. The airspace above all of these areas is included.2The American Presidency Project. Executive Order 12744 – Designation of Arabian Peninsula Areas, Airspace, and Adjacent Waters as a Combat Zone
Kosovo Area
Executive Order 13119 established the Kosovo combat zone effective March 24, 1999. The designated area covers the Federal Republic of Yugoslavia (Serbia and Montenegro), Albania, Kosovo, the Adriatic Sea, and the Ionian Sea north of the 39th parallel, along with the airspace above.3Internal Revenue Service. Combat Zones Montenegro and Kosovo have since become independent countries, and the IRS has confirmed the designation remains in force for both.
Afghanistan
Executive Order 13239 designated Afghanistan and its airspace as a combat zone effective September 19, 2001.4Federal Register. Designation of Afghanistan and the Airspace Above as a Combat Zone The large-scale U.S. military presence ended in August 2021, but no terminating order has been issued, so the designation is still active. Any service member who sets foot in Afghanistan under orders continues to qualify.3Internal Revenue Service. Combat Zones
Qualified Hazardous Duty Areas
Congress designates qualified hazardous duty areas through legislation. These locations receive the same tax treatment as presidentially designated combat zones with one important condition: the exclusion applies only during periods when service members there are entitled to hostile fire or imminent danger pay. If that pay is not authorized for your service, the location does not qualify for you.
The Balkans
Public Law 104-117 designated Bosnia and Herzegovina, Croatia, and Macedonia as qualified hazardous duty areas.5GovInfo. Public Law 104-117
Sinai Peninsula of Egypt
Section 11026 of the Tax Cuts and Jobs Act (Public Law 115-97) added the Sinai Peninsula of Egypt. The statute names “the Sinai Peninsula of Egypt” without narrower geographic language.1Office of the Law Revision Counsel. 26 USC 112 – Certain Combat Zone Compensation of Members of the Armed Forces
Kenya, Mali, Burkina Faso, and Chad
Later legislation extended the list to Kenya, Mali, Burkina Faso, and Chad. The same hostile fire or imminent danger pay condition applies.1Office of the Law Revision Counsel. 26 USC 112 – Certain Combat Zone Compensation of Members of the Armed Forces These deployments are easy to overlook because they attract less attention than larger operations.
Direct Support Areas
The Department of Defense certifies certain countries as directly supporting military operations in a designated combat zone. Service in a certified area qualifies for the exclusion, but only for periods when the service member is receiving hostile fire or imminent danger pay.3Internal Revenue Service. Combat Zones
The following countries are currently certified as supporting operations in the Afghanistan combat zone, with their effective dates:
- Jordan – September 19, 2001
- Kyrgyzstan – September 19, 2001
- Pakistan – September 19, 2001
- Tajikistan – September 19, 2001
- Uzbekistan – September 19, 2001
- Yemen – April 10, 2002
- Djibouti – July 1, 2002
- Somalia – January 1, 2004
- Syria – January 1, 2004
The Philippines was certified from January 9, 2002 through September 30, 2015. Anyone who served there during that window and did not claim the exclusion at the time may still be able to amend a prior return.3Internal Revenue Service. Combat Zones
Direct support certifications track the mission rather than the geography, so a country’s status can change when operational requirements change. The Department of Defense is responsible for the certification, and service members should keep documentation of their presence and how their duties supported combat zone operations.
How the Three Categories Differ in Practice
All three categories produce the same result for eligible pay, but they have different triggers. A presidentially designated combat zone qualifies you the moment you enter, regardless of what special pays are authorized. A qualified hazardous duty area or a direct support area qualifies you only if hostile fire or imminent danger pay is being paid for your service there. If that pay is not authorized, the location is on the list but the exclusion does not reach you.
One rule applies across all three categories: any part of a month spent in a qualifying location counts as a full month of exclusion. Arriving on March 30 and leaving April 2 qualifies you for both March and April.6Internal Revenue Service. Tax Exclusion for Combat Service
Rank also changes the amount. Enlisted members, warrant officers, and commissioned warrant officers can exclude all military pay for each qualifying month with no dollar cap. Commissioned officers face a monthly ceiling equal to the highest enlisted basic pay rate (E-9 at maximum longevity) plus the monthly hostile fire or imminent danger pay amount, currently $225.7Defense Finance and Accounting Service. Hostile Fire/Imminent Danger Pay For 2026, with E-9 maximum basic pay around $10,337 per month, that cap is roughly $10,562. Pay above that amount in a given month remains taxable for officers.6Internal Revenue Service. Tax Exclusion for Combat Service
Verifying a Location Before You File
The authoritative list of current combat zones, qualified hazardous duty areas, and direct support areas is in IRS Publication 3, the Armed Forces’ Tax Guide, which includes effective dates and any termination dates.8Internal Revenue Service. Publication 3 – Armed Forces Tax Guide The IRS combat zones page carries the same information in a shorter format.3Internal Revenue Service. Combat Zones
Confirm your location’s current status before you file. Direct support certifications end, hostile fire or imminent danger pay authorizations turn on and off, and claiming the exclusion for a location that no longer qualifies produces a deficiency plus interest. Checking against the current year’s publication takes a few minutes and settles the question.