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Service in a combat zone includes any periods you are absent from duty because of sickness, wounds, or leave. If, as a result of serving in a combat zone, a person becomes a prisoner of war or is missing in action, that person is considered to be serving in the combat zone so long as he or she keeps that status for military pay purposes.

Note. You are considered to be serving in a combat zone if you are either assigned on official temporary duty to a combat zone or you qualify for hostile fire/imminent danger pay while in a combat zone.

Qualifying service outside combat zone. Military service outside a combat zone is considered to be performed in a combat zone if:

• The service is in direct support of military operations in the combat zone, and

• The service qualifies you for special military pay for duty subject to hostile fire or imminent danger.

Military pay received for this service will qualify for the combat zone exclusion if the other requirements are met.

Nonqualifying presence in combat zone. The following military service does not qualify as service in a combat zone.

• Presence in a combat zone while on leave from a duty station located outside the combat zone,

• Passage over or through a combat zone during a trip between 2 points that are outside a combat zone, and

• Presence in a combat zone solely for your personal convenience.

Above Information Extracted from IRS Publication #3, Armed Forces Tax Guide