Incentive pay taxed or not

  • Published
  • By Anonymous
  • 39th Air Base Wing
Question: I am one of many members at Incirlik who, many months ago, chose the Y1 Incentive Pay Option - $2,000 lump sum through the Overseas Tour Extension Incentive Program. Due to Incirlik losing it's Combat Zone Tax Exemption status, I'm told that starting Jan. 1, this amount will be taxed and AFPC will not grandfather those who already signed for this amount months ago. I can understand this.

I know that there is a clause on the form that states: "I cannot change my OTEIP option once submitted unless it is for mission reasons." Myself and others signed for this amount months prior to the CZTE decision. I have asked the 39th Mission Support Squadron Military Personnel Flight what can be done so that individuals can chose from Option's Y2 or Y3 of the OTEIP program due to the fact individuals will only be receiving an estimate of $1,300 vs. $2,000.

The MPF informed me to draft an exception to policy letter with full justification to be signed by 39th Air Base Wing commander and it will be sent to USAFE and then to AFPC and they will decide if my reason is justifiable. I would like to know if, there is a way that a base agency could send a standardize waiver letter toUSAFE and AFPC in behalf of the Incirlik vs.100 different letters being processed to be able to chose from Option's Y2 or Y3 of the OTEIP program due to the CZTE decision?

Response: I had to read your action line a couple of times and then get some experts to come and explain it to clearly know your stuff. The MPF forwarded your concerns to the USAFE/A1 staff and asked about the possibility of submitting a standardized waiver letter so personnel can choose another OTEIP option. They confirmed the change to Incirlik's tax-free status does not constitute justifiable voiding of the original OTEIP agreement. They also will neither accept waivers for individuals nor allow a blanket waiver to alter your original OTEIP contract. There are strict guidelines regarding OTEIP which we must adhere to. As you stated in your action line, you were aware changes could not be made to your OTEIP option once submitted unless for mission reasons (Per the MPFM 02-48, Enlisted Overseas Returnee Counseling Handout para 2.A). OTEIP applies to all overseas locations and your choice to choose the lump sum pay option was a personal choice. The loss of CZTE at Incirlik does not fall into the category of a mission reason.

We are sorry this isn't the response you were looking for and realize the loss of CZTE-related income has far ranging impacts on all of us here. We would like to point you in the direction of the Family Support Center and encourage you to take advantage of the budgeting and investment classes, or one-on-one sessions, they offer to help maximize both your current pay and your OTEIP lump sum amount.