So if you want to read it from the IRS click here. Other wise here is my explanation.
Public Law authorizes Combat Zone Tax Exclusion for all Service Members receiving Hostile Fire Pay in Iraq and Afghanistan. A Service Member who is present, however brief, in this area, including airspace, and is on official duty qualifies for Combat Zone Tax Exclusion for that month. All pay for both enlisted personnel and warrant officers is tax exempt for the months spent in the Combat Zone Tax Exclusion area.
The cool part is the death gratuity was raised to $100,000.00. When I first entered into service this was six grand. So what is a death gratuity? It is a lump sum gratuitous payment made by the military to eligible beneficiaries of a member who dies on Active Duty. Nifty, huh?
So if I had died in '96 my folks would have been lucky to have bought a tombstone with that money, but now they could definitely buy the tombstone, casket, plot and some flowers.