Members of the military serving in Iraq, Afghanistan and other combat zones can now put money into individual retirement accounts, even if they received tax-free combat pay, according to the Internal Revenue Service.
Under the Heroes Earned Retirement Opportunities Act, signed into law on Memorial Day, taxpayers can now count tax-free combat pay when determining whether they qualify to contribute to either a Roth or traditional IRA. Before this change, members of the military whose earnings came entirely from tax-free combat pay were generally barred from using IRAs to save for retirement.
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