After you come back from a combat zone and withdrawl the whole amount, what is the percentage that is taxed? And any other comments about the SDP would be appreciated.
2007-05-08 03:28:22 · 3 answers · asked by I know EVERYTHING! 4 in Politics & Government ➔ Military
I don't think any of it should be taxed. Combat Pay is Tax Free, I don't see why that wouldn't apply to when you take it out.
Your bank may charge you for withdrawing it, but I don't think it's Taxed.
2007-05-08 03:38:59 · answer #1 · answered by Anonymous · 0⤊ 3⤋
Only the interest you earned is taxed. The income you earn to deposit in the SDP is tax-free because it is income earned in a hazardous-duty zone.
You'll be taxed at your normal rate. It does not appear that they withhold anything. You'll just be responsible for reporting the interest income that you get on Form 1099-INT on your tax return next year, and paying any applicable tax.
The interest rate is 10% APY, which is a heck of a deal. If you've been doing this, congratulations on taking advantage of a great program.
2007-05-08 10:39:55 · answer #2 · answered by Scotty Doesnt Know 7 · 4⤊ 0⤋
SDP is not taxed
2007-05-08 11:56:31 · answer #3 · answered by MP US Army 7 · 1⤊ 2⤋