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THE following information for all members of the armed forces pertains to the Current Tax Payment Act of 1943 (Public Law 68-78th Congress), and is published with the approval of the Bureau of Internal Revenue. This information supplements the Bureau of Supplies and Accounts Federal Income Tax Information Pamphlet dated December 18, 1942.
SCOPE OF ACT
1. The Current Tax Payment Act of 1943, approved June 9, 1943, makes no change in the tax rates imposed by the Revenue Act of 1942. Its application is limited to individuals and does not extend to estates, trusts, or corporations. This Act for the first time provides for the collection of taxes on income as it is earned. This change in fundamental policy has necessitated a departure from the former methods of paying taxes. As a part of the change-over to a current basis of collecting income taxes, the law provides for the withholding of tax at the source on salaries, wages and other compensation for personal services, but such withholding provisions do not apply to the service pay of members of the armed forces on active duty,
2. The Current Tax Payment Act, insofar as it is of primary interest to members of the armed forces may be divided into four principal parts:
1. Additional allowance of $1.500.
2. Cancellation of 1942 tax.
3. Current payment of tax.
4. Abatement of tax in case of death.
ADDITIONAL ALLOWANCE OF $1,500
3. Under prior law in effect for the year 1942, a member of the armed forces below the grade of commissioned officer was entitled to exclude from gross income so much of his base pay and any additional compensation for foreign or special service as did not exceed $250 if single, or $300 if married. The new law allows all military personnel, irrespective of grade and regardless of whether single or married, to exclude from gross income, beginning with the year 1943, so much of base pay for active service and additional compensation for longevity and foreign or special service as does not exceed $1,500. (Supersedes information contained in paragraph 38(a) of Federal Income Tax Information Pamphlet dated December 18, 1942.) This relief provision is in addition to the follmving personal exemptions and credits for dependents...