Up to six months after the service ends, a soldier’s back taxes are deferred and they don’t accrue any interests or penalties. For officers the period is limited to two years. Members of Army, Navy, Air Force, Marine Corps, and Coast Guard covered under the Soldiers and Sailors Civil Relief Act of 1940 are provided with this benefit. National Guards that are called to assist in a federalized status can also qualify.
The reservists who are called to active duty and the new enlistees in the army might be able to defer their back taxes during their military service and up to six months after, if they can prove their ability to pay these taxes was seriously impaired by their military duty. Only those that owe back taxes can apply for this deferral. They must have received a notice of delinquency on their account from the IRS and/or be on a installment program with the IRS.
This deferral doesn’t extend to the duties of the soldiers to file tax returns. They can receive extra time if needed if their ability or their spouse’s ability to file the tax return is impaired because of the military service in a combat zone.
According to the IRS, “The deferral is limited to an initial period of service, not reenlistment periods.
This would include:
• An active duty period pursuant to a first enlistment,
• A period of service following recall to active duty from a Reserve or National Guard unit, or
• The first period of a reenlistment following a break in service of at least one year.”