Government Contract Employee income tax exempt?

Forum|Forum|4 years ago
June 2, 2022
2 replies
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I have a client that worked in Iraq for a government contractor. Worked in a hazard zone His pay should be tax exempt correct? And how do I enter so that income is not taxed?

Lacerte Tax

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qbteachmt

Level 15

Just to review:

You don't have a Military Service member, and you don't even have a Civilian employee of the US Government. You have a Subcontractor of a Government Contractor or a payroll-based Employee of that Contractor.

Even for Military, they get pay, and you would be asking about the "allowances and differentials" or Additional pay that is for Hazard or Imminent Danger. The Employer would be responsible for identifying, submitting, and reporting that amount as falling under that specific provision.

Are you trying to make their regular pay tax free? Where did you see that provision?

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