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Basic Allowance for Housing (BAH)

Military tax-exempt allowances include the Basic Allowance for Subsistence (BAS) and the Basic Allowance for Housing (BAH). The origin of these allowances comes from the military’s tradition of paying for a service member’s room and board. Even though BAH is non-taxable, it is viewed as income when calculating things like child support by both Federal and State governments.

The largest BAH allowances are given to military members with dependents who do not live on base. The allowance is based on the assignment location, your pay-grade and if you have dependents. BAH is calculated using standard rental costs where you will be living. For example, BAH pays much more for San Diego than it does for Kansas. It is also possible to get a BAH allowance if you are living separately from your family. If you or your dependents are living overseas, you may be entitled to an Overseas Housing Allowance (OHA) instead of BAH. All full-time military who are not furnished government housing and are stationed within the 50 Continental States are entitled to BAH. When stationed in Hawaii or Alaska, you are eligible for OHA instead.

BAH II allowances are for special circumstances like military members in transit and reservists who are on active duty less than 30 days. BAH-Diff is an allowance set up to compensate any military who pay child support. Service members are entitled to BAH-Diff as long as the child support paid is higher than the BAH-Diff rate. Both BAH II and BAH-Diff are published separately from BAH rates.

BAH generally accumulates into a substantial amount of money over the course of an entire year. These amounts are excluded from tax and therefore should be calculated into the salary gap that often exists between private sector and military jobs. When was the last time your heard of GE paying for permanent housing? Military pay is often lower but allowances and other military benefits help to make military service more attractive.

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