Per IRS Publication 3 Armed Forces’ Tax Guide, on page 15:

Combat Zone Defined

A combat zone is any area the President of the United States designates by Executive order as an area in which the U.S. Armed Forces are engaging or have engaged in combat. An area usually becomes a combat zone and ceases to be a combat zone on the dates the President designates by Executive order. To date, the Afghanistan area, the Kosovo area, and the Arabian Peninsula have been designated as combat zones. Combat zone tax benefits have been designated by Congress for the Sinai Peninsula of Egypt under certain circumstances. Though the former Yugoslavia is no longer treated as a combat zone, certain benefits may still be available to those who served in that area at that time. Each of the combat zones, the Sinai Peninsula, and the former Yugoslavia area are discussed below.

Serving outside combat zone considered serving in a combat zone. Military service outside a combat zone is considered to be performed in a combat zone if:

• The DoD designates that the service is in direct support of military operations in the combat zone, and
• The service qualifies you for special military pay for duty subject to hostile fire or imminent danger under 37 U.S.C. 351.

Military pay received for this service will qualify for the combat pay exclusion if all of the requirements discussed in Service Eligible for Combat Pay Exclusion, later, other than service in a combat zone, are met and if the pay is verifiable by reference to military pay records.

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