How Do We Treat Combat Pay and Special Combat Pay?

Combat pay of any kind is only included in need analysis if it is taxable and included in the adjusted gross income (AGI) of a tax filer. It is not income earned from work. Untaxed combat pay of any kind is not included in need analysis, is not part of the student aid index (SAI) calculation, and is not included as other financial assistance (OFA) when packaging the student. Also, starting with the 2024-25 award year, under the FAFSA Simplification Act, combat pay is no longer excludable income (formerly Additional Financial Information on the FAFSA).

If the servicemember (or school) is unclear about what portion of his, her, or their income is taxable combat pay, the servicemember would need to obtain additional documentation from the commanding officer/military command, or designated military pay official.

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