On Nov. 11, 2003, President Bush signed into law the Military Family Tax Relief Act of 2003. Among its provisions are these tax breaks related to military personnel:

Death benefits
The death gratuity paid to survivors of deceased Armed Forces members is $12,000 and is not taxable.

Sale of principal residence
A taxpayer on qualified official extended duty in the U.S. Armed Services or the Foreign Service may suspend for up to 10 years of such duty time the running of the 5-year ownership-and-use period before the sale of a residence. This applies when the duty station is at least 50 miles from the residence – or while the person is residing under orders in government housing – for a period of more than 90 days or for an indefinite period. This election, which is an option for the taxpayer, applies to only one property at a time.

Deduction for overnight travel expenses of National Guard and Reserve members
Reservists who stay overnight more than 100 miles away from home while in service (e.g., for a drill or meeting) may deduct unreimbursed travel expenses (transportation, meals and lodging) as an above-the-line deduction. The deduction is limited to the rates for such expenses authorized for federal employees, including per diem in lieu of subsistence.

Dept. of Defense Homeowners Assistance Program
Payments made under this program will offset the adverse effects on housing values of military base realignments or closures will be excludable from income as a fringe benefit.

Combat zone extensions expanded to contingency operations
The various extensions granted to combat zone participants to file returns or pay taxes will also apply to those serving in Contingency Operations, as designated by the Secretary of Defense.

Dependent care assistance programs
Clarifies that dependent care assistance programs for military personnel are excludable benefits.

Military academy attendees
The ten percent tax on payments from a Qualified Tuition Program or Coverdell Education Savings Account that are not used for educational expenses does not apply to attendees of the U.S. Military, Naval, Air Force, Coast Guard or Merchant Marine Academies, to the extent the payments do not exceed the costs of advanced education.