Understanding the tax law may help ease the tax burden or possibly lower tax payments for military personnel.

» First-time homebuyer credit: To qualify, a taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30 and close by June 30. But the rules for certain military taxpayers allow more time to use the credit.

Military personnel and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit.

Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011, and close by June 30, 2011.

This special rule also applies to members of the uniformed services.

» Longtime resident homebuyer credit: If you are not a first-time homebuyer, you may be able to claim the credit if: (1) you buy a main home in the U.S. after Nov. 6, 2009, and before May 1 (before July 1 if you entered into a written binding contract before May 1), and (2) you (and, if you are married, your spouse) owned and used the same home as your main residence for any five consecutive years during the eight years ending on the date of purchase of the home described in (1).

For military personnel, if you (or spouse) are on qualified official extended duty outside the U.S. for at least 90 days after 2008 and before May 1, the above dates are extended to May 1, 2011, and July 1, 2011, respectively.

» Armed forces reservist: Reservists who travel more than 100 miles from home on active reserve duty may deduct travel expenses as an adjustment to income on line 24 of Form 1040, U.S. Individual Income Tax Return, rather than as a miscellaneous itemized deduction. The deduction is limited to the amount the federal government pays its employees for travel expenses.

» State residency: Military personnel may have a “;home of record”; and a “;legal residence”; that are not the same. A “;home of record”; is where a person was living at the time of enlistment. A “;legal residence”; is the state where one intends to return and live after discharge or retirement.

A person living in Hawaii for more than 200 days during a tax year is considered a resident.

If you are in Hawaii due to military orders and don't intend to make Hawaii your permanent home, you are not considered a resident for income tax purposes.