Tax Deadlines Extended 180 Days for Combat Zone Trips

Many merchant sailors work aboard ships that are routinely assigned to move cargo intended to be used in geographic areas in support of what our federal government refers to as combat zones.  IRS Publication 3 lists these combat zones as the Afghanistan area, the Kosovo area, and the Persian Gulf area which includes "the total land areas of Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates."  See Pub 3 Page 7.

For merchant sailors, these combat zones also include the Adriatic Sea, the Persian Gulf, the Gulf of Oman, the Gulf of Aden, part of the Ionian Sea, and part of the Arabian Sea.  For a more complete description of these combat zones, discuss this issue with your tax preparer. 

Now for the good news.  Taxpayers serving in combat zones are excused from complying with a variety of tax-related deadlines (including tax filing and payments). The extension applies during the time the taxpayer is in a combat zone, plus 180 days thereafter. MFTRA modified Internal Revenue Code (IRC) 7508(a) to expand the extension rules to those involved in contingency operations - those operations involving military actions or hostilities against an enemy of the U.S. -- as designated by the Secretary of Defense or declarations of a national emergency by the President or Congress.  

The new suspension rules apply to military personnel located inside a combat zone (and those who support activities in a combat zone), Merchant Marines, Red Cross personnel, accredited correspondents, and civilian personnel engaged in support activities (i.e. those working for Halburton or similar companies). The new suspension rules apply only to deadlines that occur while the taxpayer meets these combat zone requirements. The exception also applies to spouses of those within a combat zone.

Tax Tip:  Many mariners out to sea around the April 15th deadline tend to panic. If your travel qualifies as being in or in support of a combat zone, remember you have an additional 180 days after you return from sea before you need to do anything.  No April 15th paperwork needs to be filed with the federal or state government, so relax. MFTRA also clarifies this 180 day postponement also applies to your spouse, so they can relax too.  For example, click here if you live in California.

Tax Tip:  Most mariners live in states with an income tax and are routinely required to make estimated state tax payments to avoid penalties.  If your travel qualifies as being in or in support of a combat zone, you may either avoid or greatly reduce state tax penalties.

A few words of caution:  Unfortunately many merchant sailors and some tax preparers still incorrectly believe that merchant sailors qualify to claim combat or war zone exclusions for part of all of their wages.  If this caution comes as a surprise to you or your tax preparer, CALL OUR OFFICE IMMEDIATELY.