Taxable and Non-taxable Allowances


I've noticed some questions on Yahoo answers about which allowances are taxable and which are not.  Because allowances can make up a large part of total income, the tax status of allowances is a big deal to military families.  A non-taxable $2500 housing allowance is worth a lot more than a corresponding $2500 increase in pay would be.

At the current time, the only taxable allowance is CONUS COLA, the Cost of Living Allowance paid to people who living in certain expensive parts of the continental United States.  Anything else that is considered an allowance is non-taxable.

By federal law, all new allowances created after 1986 will be taxable.  However, that law doesn't seem to have been followed very well.  There was an allowance created (and later eliminated) after 1986 that was non-taxable.  We shall see what happens if any new allowances are created in the future.

Basic Allowance for Housing (BAH) - non-taxable

Basic Allowance for Subsistence (BAS) - non-taxable

Clothing Allowance - non-taxable

Cost of Living Allowance (COLA), within the US (CONUS) - taxable

Cost of Living Allowance (COLA), outside the continental US (OCONUS) - non-taxable

Dislocation Allowance (DLA) - non-taxable

Family Separation Allowance (FSA) - non-taxable

Family Subsistence Supplemental Allowance - non-taxable

Mileage In Lieu of Transportation (MALT) - non-taxable

Move In Housing Allowance (MIHA) - non-taxable

Overseas Housing Allowance (OHA) - non-taxable

Per Diem - non-taxable

Temporary Housing Allowance (TLA) used in conjunction with an overseas move - non-taxable

Temporary Housing Expense (TLE) used in conjunction with a move within the continental United States -non-taxable

Please let me know if you see any errors or omissions.  I'm pretty sure I got everything that is considered an allowance, but I am always learning new things and wouldn't be at all surprised to hear that there is an allowance that I missed.

Update in response to comments:  I'm sure you all know this, but if it is called a "pay," it is usually taxable.  Pay is totally different from allowances.

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