Case Study 1: Hostile Fire/Imminent Danger Pay
Sgt. Bobby Osage was not assigned to a combat zone, but he did duty that qualified him for hostile fire pay. He can exclude that income.
Members of the U.S. Armed Forces who serve in a combat zone may exclude certain pay from their income. The entitlement to the pay must have fully accrued in a month during which they served in the combat zone or were hospitalized due to wounds, disease, or injury incurred while serving in the combat zone. They do not have to receive the pay while in a combat zone, in a hospital, or in the same year they served in a combat zone.
Military service outside a combat zone is considered to be performed in a combat zone if the service:
Military pay received for this service will qualify for the combat zone exclusion if the other requirements are met.