TurboTax / Tax Calculators & Tips / All Tax Guides / Family / Video: 2011 Tax Credits for Deployed Soldiers

Video: 2011 Tax Credits for Deployed Soldiers

Updated for Tax Year 2011


If you're a soldier and were deployed this year, there are some important tax implications you need to know about. Watch this video to find out more.

Note: The tax credits described in this video are applicable to tax years 2009 through 2011.

Hello, I’m Tammy from TurboTax with some information for taxpayers serving in the military. As a member of the military, you can take any tax credit that’s available to non- military taxpayers—provided you qualify for it. However, if you are required to serve outside of the United States, the IRS provides some special rules that may just make you eligible for additional tax credits.

Two of the biggest concessions the tax law makes for deployed soldiers are an extension of the deadline to qualify for the first-time homebuyer credit and the earned income credit. The first-time homebuyer credit reduces your tax bill on a dollar-for-dollar basis by the smaller of $8,000 or 10 percent of the purchase price of your home. However, the home you purchase must be your principal residence and not a vacation home or rental property.

If you were deployed outside of the U.S. for at least 90 days between January 1, 2009 and April 30, 2010, the IRS gives you more time than other taxpayers to enter into a contract and complete the purchase of your home in order to qualify for the first-time homebuyer credit. This requires that you had entered into a contract to purchase your home on or before April 30, 2011 and closed no later than June 30, 2011.

For other taxpayers, the first- time homebuyer credit isn’t available after 2010. Another beneficial credit is the earned income credit. This credit is refundable, meaning it can provide a tax refund even if you don't owe any taxes.Typically, taxpayers who report their dependent children must reside with them in the U.S. for more than half of the tax year.

However, another exception exists for military personnel who are stationed outside of the U.S. for an indefinite period or more than 90 days. For purposes of the earned income credit, the IRS treats the period that you and your family are abroad as a temporary absence —meaning you are treated as residing in the U.S. the entire time. This exception also applies if you are outside of the U.S. while your family remains at home. In other words, you are considered to be living with your children in the U.S. despite being deployed abroad.

Remember, when you file with TurboTax, we’ll ask you simple questions and determine which deductions and credits you qualify for. For more information about this and other tax topics, visit TurboTax.com. 

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99$34.99*
Start for Free

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

* Important Offer Details and Disclosures
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Actual prices are determined at the time of print or efile and are subject to change without notice. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal efile of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Prices subject to change without notice.
  • TurboTax Mobile: Actual prices are determined at the time of print or efile and are subject to change without notice. Come back here before you file to confirm that the price has not changed, especially if it's been a while since you downloaded this app.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app features and content. TurboTax mobile app devices supported include Android 4.1 and above, iOS 8 on iPhone 4s and above, and iPad 2.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • About our TurboTax Product Experts: Customer service and product support (phone or chat) vary by time of year. Phone support not included with Free Edition.
  • About our credentialed tax experts: Live tax advice service is available for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Click here for full terms and conditions. Not available for TurboTax Business customers.
  • Get up to 10% on top of your federal refund: Amazon.com Gift Card offer is for federal refunds only. Limits apply ($2000 per e-card, maximum $10,000 per customer). Offer available only for TurboTax Online (except Federal Free Edition) or CD/download versions sold and shipped, or downloaded directly from Intuit or Amazon. Except as required by law, Amazon.com Gift Cards cannot be canceled, transferred for value or redeemed for cash.

    Amazon.com is not a sponsor of this promotion. Except as required by law, Amazon.com Gift Cards ('GCs') cannot be transferred for value or redeemed for cash. GCs may be used only for purchases of eligible goods at Amazon.com or certain of its affiliated websites. For complete terms and conditions, see www.amazon.com/gc-legal. GCs are issued by ACI Gift Cards, Inc., a Washington corporation. All Amazon ®, ™ & © are IP of Amazon.com or its affiliates. No expiration date or service fees.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2013 TurboTax products.
  • 4.8 out of 5 stars: Average based on customer ratings on TurboTax.com for TurboTax Online and CD/download products tax year 2014, as of January 2015.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • TurboTax CD/Download priority phone support: Priority phone support for TurboTax CD/Download Premier and Home & Business is accessible exclusively via the TurboTax.com Help Center.
  • Benefit Assist: After you file, TurboTax automatically shows you a full list of government benefits you may qualify for, like Food Stamps or reduced phone & utilities. Plus, we help you apply, saving you time and making it easier than ever to get more money! Estimate based on calculation of Benefit Assist users from tax year 2013 and published reports of average benefit and savings amounts from federal and state programs. Actual amounts and qualifications based on your individual situation; some individuals will not qualify. Feature may not be available for all customers.
  • Simplified State Experience: New, simplified state tax preparation available for most filers.
  • Eligibility for $25 cash back for returning Deluxe customers: Customers who have completed their 2013 taxes in TurboTax Deluxe (CD or download), and have completed their 2014 taxes in either TurboTax Premier or TurboTax Home & Business (CD or download), and apply here before 11:59PM PDT April 20, 2015, are eligible for $25 back. 2014 TurboTax Advantage users are ineligible for this offer. Terms and conditions are subject to change without notice.
  • $0 Upgrade Offer: Valid for customers who filed their 2013 taxes with TurboTax Deluxe (CD or download), completed prior year data transfer this year, and encounter an upgrade to either 2014 TurboTax Premier or 2014 TurboTax Home & Business (CD or download). Valid February 6, 2015 through April 20, 2015. TurboTax Advantage users are ineligible for this offer. This offer may not be combined with our $25 cash back offer. Terms and conditions are subject to change without notice.