Fastbird93

iTrader: (10)

I need to know if anyone has experienced THIS EXACT SITUATION.

I went on a short TDY to a CZTE (combat zone tax exclusion) location. December tax free. On 28 December I re-enlisted to the tune of a $20,xxx bonus. Second week of January 2007, first half of bonus pays out, with taxes taken out as expected.

I contact my finanace office, who starts a CMS case. CMS finding is that I'll get the money back in my taxes after filing.

I'm EXTREMELY skeptical about the validity of that. How is the IRS just magically going to know that I had $2600 federal and $400 state taxes withheld on my bonus payment in january when I'm filing my taxes for 2006??

Has anyone experienced this or a very similar situation before? It's kind of unique being that it paid out in 2007, but is tax free based on 2006 when it was technically earned.

If you haven't figured out, Finance at McGuire AFB is rather pathetic and incompetent.

brad8266

iTrader: (23)

If they took tax you wont get it back, its gone. If you payed 5K in tax some of it went to the federal government, some to state, some to social security, some to medicare. You wont get it back.

So youre from Sicklerville huh? I am from that area too, I grew up in Somerdale.

Fastbird93

iTrader: (10)

As for the taxes, you're wrong. The federal and state are entitled to come back because the bonus was earned in a month that was designated tax exempt by my presence in a CZTE. Right there in the regs. What I'm having trouble with is an incompetent finance office that doesn't know what the hell they're doing.

brad8266

iTrader: (23)

It shouldnt have been taken in the first place, once its gone good luck getting it back. If you knew all this already then why did you ask in the first place? And youre wrong BTW.

Money earned in the combat zone should have been excluded from your taxable income which means it should not have been taxed and should not be reflected on your W2, which i am sure it is since they took tax. You are going to have to have finance make you a W2-C that shows the bonus not included in your taxable income.

You can tell the IRS that you were in a combat zone till youre blue in the face, they wont care unless the W2 shows accordingly. If your W2 shows the bonus as part of your taxable income, youre gonna pay tax on it and not get it back.

Fastbird93

iTrader: (10)

Ok, you've never gotten a quick TDY in december then. Normally, if you go on a quick TDY into theater without going through PERSCO, your CZTE gets given back to you the subsequent month in a paycheck baed off the verification of your CZTE via your filed travel voucher. However, you cannot be given back taxes paid one year in another year. I.E., taxes paid in december cannot simply be refunded to you as normal in a January paycheck. Hence the need for a W-2C to reflect your corrections to receive the December tax refund when you file your income taxes.

This situation is rather unique though, as December was a tax free month for me but the bonus paid out in January, which is causing a host of problems. Not to mention that it was not reflected on the W-2 just makes it more troublesome. Add to it a finance office that didn't even think they were the ones to pay out the bonus, and maybe you'll see my conundrum.

I appreciate the help, but I was asking for people who've been in the situation I'm in, and not help from people who don't know what they're talking about. Just because taxes were paid on it doens't mean it's gone. You think like that, and you lose the money. You have to be knowledgable about your entitlements and know what you have coming back. Knowledge is key.

brad8266

iTrader: (23)

lol, i wouldnt lose any money, id get it back. It wouldnt be a problem for me. Good luck man.

Grave

iTrader: (4)

I haven't been in this situation, but this is what I would do...

Take a copy of your December orders, travel voucher and your re-enlistment paperwork to Finance, and show it to one of the supervisors there. Then explain to them exactly what you explained to us. If you're not satisfied with their answer, talk to the NCOIC.

If you still feel like you're getting the run around, I'd bring this to my Shirt's attention. Sometimes with their rank they have a little more pull in situations like this.

GEARHED

iTrader: (5)

Two in our unit had the exact situation: 90 day to a CZTE 11/04 with $20,000 bonus for re-enlist 6 yr contract effect date 22.12.04. Same deal, taxed in Jan 05' on first half of payment and once it had gone to the top of command, come to find out you have to be sworn in *prior* to December 31st or it is taxed regardless of CZTE. PDT has to be done prior as well as all sign off or it is taxable earnings.

Outcome: both got full refund of all taxes with interest as per IRS tax law because they filed an amendment with copy of DD214, copy of re-enlist contract and proof of PDT signed off in Feb 06'. CMS will send the information for you but the best way is to do your filing (and/or ammendment) using the red ink across the top regardless of what form you are using. Just keep on top of everyone making sure they send the actual date you signed even if you were not sworn in - you signed so at that time you agreed to the terms of the bonus to be effective December 2006 and unless otherwise noted, bonus is to be paid at that time.

This is not across the board. You really need to look at this on a case by case basis as not everyone is eligible even though they signed contract. The technical issue is DATE sworn in though that isn't always possible if you are not in a location with proper personnel where it can be done.

Unfortunately this truly is at the whim of who is going to be on the ball and those that could care less, the two in our unit we helped out the NCOIC was worthless and it was the 1LT knew what to do. XO had no interest or clue.

Good luck.