18b — Nontaxable Combat Pay Election Updated for tax year 2025

What this line means

If you received nontaxable combat zone pay, you can elect to include it as earned income for the additional child tax credit calculation. This is the same election available for the earned income credit. Including combat pay increases your earned income on line 18a, which can increase the 15% calculation on line 20 and produce a larger refundable credit.

Does this apply to you?

• You are active-duty military and received nontaxable combat zone pay
• You want to increase your earned income for the additional child tax credit calculation
• You reported nontaxable combat pay on Form 1040 line 1i

Easy to overlook

The election applies to both the EIC and the additional child tax credit If you elect to include combat pay as earned income, the election applies to both the earned income credit and the additional child tax credit. You cannot include it for one credit and exclude it for the other. Run the numbers both ways to see which produces the better combined result. ¹ [SOURCE: IRC Section 32(c)(2)(B)(vi) — combat pay election for refundable credits]

Including combat pay can sometimes reduce your benefit Adding combat pay increases earned income, which increases the 15% calculation — but it can also affect the earned income credit phaseout. If your total earned income with combat pay pushes you into the EIC phaseout range, the combined benefit of both credits may be lower than excluding the combat pay. ² [SOURCE: IRS Schedule 8812 instructions — combat pay election]

Watch out for this

Making the election without comparing both scenarios. The election is optional, and the best choice depends on your total income and number of children. Tax software typically runs both calculations automatically, but paper filers need to compute both scenarios to determine which produces the larger total benefit.

Related lines on your return

• Line 1i — Form 1040 — Nontaxable combat pay; the amount available for the election
• Line 18a — Schedule 8812 — Earned income; combat pay is added to this if elected
• Line 27a — Form 1040 — Earned income credit; also affected by this election