Are Military Reenlistment Bonuses Taxed?
In short, money earned while you are serving in a combat zone is tax-free. This can include your reenlistment bonus, provided you signed the reenlistment paperwork while you were in the tax-exempt combat zone.
Are military enlistment bonuses taxed?
Here's the key to the whole thing: bonuses are taxed like regular income. There are taxes withheld on bonuses like there are taxes withheld on regular pay.
Military Bonuses and Taxes
Do you get taxes back from military bonus?
Re-enlistment bonuses are taxed like regular income and are typically added in with your regular wages and reported on the same W-2.
How do I report an military re-enlistement bonus?
How are Army reenlistment bonuses paid out?
The bonus is usually paid in a lump sum of 50% paid at the time of reenlistment. The remaining bonus amount is paid in equal annual installments. It is taxable, however if you reeenlist in a tax-free combat zone or are a foreign national who reenlists OCONUS it is not taxable, and the installments are also tax-free.
The Selective Reenlistment Bonus (SRB) - Military.com