14
14
0
Currently, retention bonuses are taxed at 25% (3% less than regular taxed income).
Military Career
Retention
Leadership
Money
Taxes
Posted >1 y ago
Responses: 18
6
6
0
So if you get a renlistment bonus of $40,000 you have to give back $10,000. Now, tell me, just how much sense does that make. "Here, Soldier, I will give you $40,000 if you re-up. OK Thank you. Oh, Did I say $40,000? Oops, I meant to say $30,000. That's OK though, just "suck it up sucker."
(6)
(0)
SPC (Join to see)
Oh, did I say $30,000? Well hold on we're only giving you $15,000. Then we'll give you the rest in installments. That's ok right?
(1)
(0)
MAJ (Join to see)
Tax laws are very confusing, bonus are counted as regular income for tax payment purposes, they are withheld from your income at a "supplemental" rate of 25%. What that means is when you file your tax return you get the money back that is in excess of your actual tax percentage.
(1)
(0)
5
5
0
If you want people to stay in, people like me and other lower enlisted who are still in their first contract trying to decide whether or not to make it a career or bail, then dont tax the bonus they GET for staying in. Its supposed to be an incentive.
(5)
(0)
4
4
0
This has always been an issue. Let's change it. SGM, post another comment for all RP members to contact AUSA and have them speak for the Veterans and Active Duty Service Members on this topic to members of Congress.
Just an idea.
Just an idea.
(4)
(0)
3
3
0
SGT (Join to see)
My thoughts exactly!!! That's the only reason I wasn't upset they are taxing my bonus.
(1)
(0)
MAJ (Join to see)
25% is the rate at which the taxes are withheld from your bonus, come April bonuses are counted as normal income.
(0)
(0)
3
3
0
So we're paid from taxes that get taxed, and our bonus is taxed from the taxes that are paid to us that we pay taxes on?
No I don't think it should be and I don't think anyone should get screwed over around April 15th for the addition to their income. Hey Troop, here's $10,000 for re-enlisting so we can maintain your level of experience and the troop levels we need. Oh by the way you only get half, after taxes, so it's $3,500. The other half, after taxes we'll give to you in installments.
Bonuses are kind of a joke in my opinion, not really the reason anyone should have to re-enlist since they're kinda BS.
No I don't think it should be and I don't think anyone should get screwed over around April 15th for the addition to their income. Hey Troop, here's $10,000 for re-enlisting so we can maintain your level of experience and the troop levels we need. Oh by the way you only get half, after taxes, so it's $3,500. The other half, after taxes we'll give to you in installments.
Bonuses are kind of a joke in my opinion, not really the reason anyone should have to re-enlist since they're kinda BS.
(3)
(0)
SPC (Join to see)
SGM Matthew Quick - I wasn't aware of that extension SGM, that's definitely a proposal people would at least consider.
(0)
(0)
MSG (Join to see)
Reenlistment bonuses are no longer paid in installments, they are paid in lump sums. SGM Quick, how long now has this been so? I can't imagine a PV2 would remember the times when reenlistment bonuses were paid in installments. I can't speak for initial enlistment bonuses, though.
(0)
(0)
MSG (Join to see)
Also, I don't know how bonuses are paid in the guard and reserves. I see a lot of posts from RC soldiers talking about installments. Active duty bonuses are paid in lump sums, though.
(0)
(0)
SPC (Join to see)
MSG (Join to see) - Mine is paid in installments, I think I get my next installment next year. Though I'm NG.
(0)
(0)
3
3
0
All military pay should be tax-free. DOD should make appropriate SS contributions for a military folks. I was spoiled in Korea, no tax for 27 months but my SS life long earnings history show the money I earned while in the Army during those years, I guess to calculate into SS benefits.
(3)
(0)
SP5 Peter Keane
Pretty sure you paid SS. I know in Vietnam while Income tax free, we still put in our SS
(0)
(0)
3
3
0
I don't have an appropriate answer option. I think it should always be taxed.
(3)
(0)
SFC Curtis Halford (Ret)
So you think that there shouldn't be a combat zone tax exclusion at all? All earnings (to included bonuses) are tax-free in a combat zone. To say that it should always be taxed is to say that some earnings in the CZTE area should be taxed when even regular income is not. I think this question is whether a retention bonus should be categorized more like BAH, BAS, CRA, and other untaxed military payments.
(0)
(0)
1SG (Join to see)
I can get behind BAH and BAS being untaxed as that is supposed to make up for what troops in the barracks receive "for free". I think everything else should be taxed as it's income. I don't think that because I was in a certain location, I should be exempt from paying taxes on my income. Deployed, I already get imminent danger and hazardous duty pay, as well as speration pay, not to mention credit relief. I don't see a logical justification for CZTE. If you think the troops need more compensation for deployments, just increase hazardous duty pay. In general, I don't support tax exemptions for anyone. Our tax code should be almost infinitely more simple.
(1)
(0)
2
2
0
Honestly military pay shouldn't even be taxed in my opinion. Its basically the government getting a partial refund of what they pay you.
(2)
(0)
SPC (Join to see)
We're going to give you money from taxes that we can tax you so you can get money from taxes. Makes sense.
(0)
(0)
2
2
0
I would prefer tax free... Because who doesn't want more money!
If it says 20k for 36 AOS... Give it to em 20k.
If it says 20k for 36 AOS... Give it to em 20k.
(2)
(0)
2
2
0
The last time I reenlisted was in 2015. 6 years for $12k. That was split. $6k up front and $6k after 4 years. Taxes turned that $6k into $4.8k. A year later I started as a Technician with the Guard. A month or so later I was contacted and told that by becoming a Tech, I forfeit that second half of the bonus.
(2)
(0)
SGT (Join to see)
I accepted a temp tech job and it was brought to our attention but we were just told contact your recruiter to see if you will lose it.
(0)
(0)
SSG (Join to see)
I don't see why it should have effected you as a temp tech SGT (Join to see). The day I went in for my in-processing they didn't make any mention of it.
And howdy neighbor! lol
And howdy neighbor! lol
(0)
(0)
SGT (Join to see)
When we did the in processing, some of us were temp and some were permanent. If you work in excess of 180 days then you lose the bonus.
(1)
(0)
SPC (Join to see)
I always think that stuff is funny, join the military here's a bonus. Taking on more responsibility to further the mission? Screw you guy, we're taking that bonus back.
(0)
(0)
Read This Next
Continue with Facebook 
Continue with Google