These are usually limited to those in the medical field, aviators, and those in select nuclear specialties. These are all on a case-by-case basis and are spelled out in US Code: 37 U. C, Chapter 5. This is the section everyone wants to read! If you qualify for a bonus, you want to know when you get paid, right?
Fair enough. This is generally after completion of your initial technical training. The Navy pays out its annual installments on October 1, which is the start of the fiscal year. The other branches of the service pay their enlistment and reenlistment bonuses on the anniversary of the date you received your initial installment.
Update: a reader recently wrote in to tell us the Navy now pays out reenlistment bonuses on the anniversary of your reenlistment, just like the other branches do. Why annual installments? Failure to meet the technical standards for your career field, or failure to meet other standards may make you ineligible to receive your bonus payment.
This is automatically done by the government, and not something you can change. If the withholding is too high for your tax bracket, then you will likely receive a larger than normal refund the following year.
In short, money earned while you are serving in a combat zone is tax-free. This can include your reenlistment bonus, provided you signed the reenlistment paperwork while you were in the tax-exempt combat zone.
This also covers your annual installment bonuses, even if they are later received when you are no longer serving in the tax-exempt combat zone. However, if you signed the paperwork outside the combat zone, it is not tax-exempt, even if you receive the bonus or annual installment while you are in the combat zone. Example 5. In July, while serving in a combat zone, an enlisted member voluntarily reenlisted. After July, the member neither served in a combat zone nor was hospitalized for wounds incurred in the combat zone.
In February of the following year, the member received a bonus as a result of the July reenlistment. The reenlistment bonus can be excluded from income as combat zone compensation although received outside of the combat zone, since the member completed the necessary action for entitlement to the reenlistment bonus in a month during which the member served in the combat zone.
Example 6. In July, while serving outside a combat zone, an enlisted member voluntarily reenlisted. In February of the following year, the member, while performing services in a combat zone, received a bonus as a result of the July reenlistment. The reenlistment bonus cannot be excluded from income as combat zone compensation although received while serving in the combat zone, since the member completed the necessary action for entitlement to the reenlistment bonus in a month during which the member had neither served in the combat zone nor was hospitalized for wounds incurred while serving in a combat zone.
This tax exemption has another important factor which we cover in the next section about the Thrift Savings Plan. Taking this a step further, tax-exempt TSP contributions are extremely valuable as the income has never been taxed. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. You May Also Like. When is your LES available? We have the answers here! My Profile News Home Page.
Get the Military Insider Newsletter Get the latest on pay updates, benefit changes and award-winning military content. By signing up, you agree to our Privacy Notice. The opportunity to earn a college degree without student loan debt is another standout benefit of military service. You can transfer part or all of this benefit to a spouse or child. The military also provides hands-on career training for your military occupational specialty that will benefit you whether you continue in the military or return to a civilian career.
Here are some other education benefits for which you might become eligible as a service member. Service members also get many other benefits. Reserve duty service members are eligible for partial benefits. Reservists become eligible for full benefits if they are called to active duty. With the huge sacrifices involved in serving, it only makes sense that the military would want to advertise what service members stand to gain.
Talking to individuals who have actually served and are not recruiters can help you get a more balanced picture of the pros and cons of serving and decide whether you want to pursue this path. You just might have to do more research to find them. Military OneSource. Army Recruiting Command. Army My Army Benefits. Department of Defense. Accessed Aug. Directorate of Military Compensation Policy.
Office of Financial Readiness. Thrift Savings Plan. Uniformed Services Blended Retirement Services. Defense Finance and Accounting Services. Department of Veterans Affairs. MyNavy HR. Department of Education Federal Student Aid. Internal Revenue Service. Congressional Research Service. Career Advice. Family Finances. Saving For College. Health Insurance. Personal Finance. Current subject to change based on Army requirements high demand MOSs include:.
A Retention Bonus is not authorized for members who have completed more than 25 years of active duty or who will complete their 25th year of active duty before the end of the period of active duty for which the bonus is being offered.
Reenlistment Bonus : A Soldier currently serving in the Army may be eligible for a reenlistment bonus, provided the Soldier:.
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