A Service member’s pay during deployment to a qualified combat zone may be excluded from federal taxes (except Medicare and Social Security). This provision means big savings and more money in your pocket. Put these extra resources to work to achieve your financial goals. Review this handout for more information on the Combat Zone Tax Exclusion.

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But keep in mind, just because a qualified deployment is tax free, doesn’t mean you don’t have to file your taxes during a deployment. Do your homework! 

• Know how deployment will impact your tax situation.
• Make sure you know how to access tax documents.
• Work with an accountant or tax center if needed.

Learn more about how to best prepare by visiting Military OneSource.

Think about your most recent savings account statement. You are probably earning next to nothing in interest. The Savings Deposit Program (SDP) was established by the DoD to provide the opportunity to build savings while deployed to an SDP-eligible combat zone.

The account earns a 10% annual return (compounded monthly, paid quarterly), on up to $10,000. Interest continues to accrue 90 days post-deployment. It is important to note that there are limitations on withdrawing funds in the SDP, so use your budget to determine how much you can afford to put away while still meeting your other goals.

Your Service member needs to set this up after a minimum of 30 days into a deployment. They will have resources available on the deployment. It is important to note the account can’t be closed until redeployment and any emergency withdrawals need approval from a commanding officer. So again, budget wisely for this great savings opportunity.

Click here to visit the Defense Finance and Accounting Service for more information.

Deployments can be a good time to consider increasing your retirement contributions.  If you want to make any changes, the service member will have to log into their myPay account here: https://mypay.dfas.mil/#/. Your spouse and their services’s contributions (if covered under BRS) are tax exempt up to the annual limit during a deployment to a designated combat zone. Click here for more information about the TSP contribution limits.

The MLA provides protection from predatory lending and sets limits on interest rates. The SCRA gives Service members the opportunity to cancel contracts (an auto or residential lease, or a cell phone contract, for example) without penalty. The SCRA sets a 6% cap on debt incurred before the Service member joined or was activated. It applies only while on active status. Check to see if these provisions can help save you money during a deployment.

Visit these links to learn more: 

• MLA
• SCRA

Identity theft is an issue we all need to be aware of and take steps to protect ourselves and our families. Here are steps you can take:

• Active Duty Alert — Call one of the three national consumer credit reporting agencies to put an alert in place. This will require additional steps to verify identity if credit is applied for in the Service member’s name. The alert is only good for one year. You may need to call again depending on the length of the deployment.
• Security/Credit Freeze — This step will restrict access to your credit report, which will prevent creditors from approving a new account. You must call all three credit reporting agencies.

Monitor your credit. Make sure you review your credit report and accounts regularly.

Be mindful and alert to misleading consumer practices! You should report scams to the Federal Trade Commission (FTC) immediately if you find yourself a victim or identify criminal activity. Click here to begin.

Check out Money Ready 201, Protect Your Identity to learn more.

Or review this handout for additional resources for military consumers.

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The interest on your spouse's student loans may be suspended for the duration of deployment to a combat zone. Service in a hostile fire area may even qualify for cancellation of some portion of the loan. Remember, the SCRA limits the interest rate to 6% during deployment. Also, make sure to let the loan provider know when the deployment ends.