Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 68-11

1968-1 C.B. 54

Sec. 112

IRS Headnote

Enlisted men and warrant officers who serve in the temporary rank of a commissioned officer in a combat zone are entitled to exclude from gross income-(1) the entire amount of their active service compensation attributable to their service below the grade of commissioned officer, and (2) that portion of their active service compensation attributable to their service as a temporary commissioned officer which does not exceed $500 per month.

Full Text

Rev. Rul. 68-11

Advice has been requested as to the amount warrant officers and enlisted personnel, who accept temporary appointments as commissioned officers, may exclude as combat pay.

Section 112(a) of the Internal Revenue Code of 1954 provides for an exclusion from gross income of compensation received for active service as a member below the grade of commissioned officer in the Armed Forces of the United States for any month during any part of which such member served in a combat zone during an induction period. Section 112(b) of the Code provides a similar exclusion for compensation received for active service as a commissioned officer in the Armed Forces of the United States for any month during any part of which such officer served in a combat zone, but the exclusion is limited to $500 per month.

The temporary appointments involved in the request for advice are being granted pursuant to section 5596 of title 10, United States Code.

Section 112 of the Code grants an exclusion based upon the type of active service for which compensation is received, for example: `* * * for active service as a commissioned officer * * *.'

Accordingly, to the extent that compensation received for active service as a member in the Armed Forces of the United States for any month during any part of which such member served in a combat zone during an induction period is attributable to his service as an enlisted man or warrant officer, it is entirely excludable from his gross income. However, to the extent that such compensation received is attributable to service as a commissioned officer, it is excludable from his gross income only to the extent that it does not exceed $500 per month. Hence, this latter exclusion applies to all or any portion of the compensation described which is attributable to service as a commissioned officer under a temporary appointment granted pursuant to section 5596 of title 10, United States Code or any other similar type of appointment.