Reservists who get called into active duty will be allowed to withdraw funds from their retirement plans such as IRAs, 401(k)s, and 403(b)s without having to pay the standard 10% penalty. Note, these withdrawals will still be taxed as income, it is only the actual 10% penalty that is being waived.
Military death benefits and military insurance proceeds may be rolled over into ROTH IRAs or Coverdell Education Savings Accounts (ESAs) tax-free without regard to the standard limits/restrictions.
Economic Stimulus Payments
As long as one spouse is a member of the military, the couple will qualify to receive an economic stimulus rebate check.
Earned Income Credit
Non-taxable combat pay will be treated as earned income when calculating the Earned Income Credit.
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