OVERSEAS INTEL

KUWAIT — For over two decades, Ali Al Salem Air Base—nicknamed “The Rock”—has been a major hub for U.S. military operations in the Middle East. Nestled in the Kuwaiti desert, it has transformed from a dusty tent city into a permanent, well-fortified base. Along the way, thousands of American contractors have worked here, supporting everything from aircraft maintenance to IT, logistics, and base security.

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According to the IRS, the Foreign Earned Income Exclusion has increased in recent years as part of its annual inflation adjustments. The exclusion was $120,000 for 2023, $126,500 for 2024, $130,000 for 2025, and rises to $132,900 for 2026. For contractors working outside the United States, that means a larger portion of qualifying overseas income may be excluded from U.S. federal income tax each year, as long as the worker meets IRS requirements.

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Private military contractors remain a critical part of U.S. defense operations worldwide, supporting missions across combat zones, base operations, and strategic locations. In recent years, the Department of Defense has continued to rely heavily on contractors, with spending consistently reaching hundreds of billions annually, often accounting for a significant portion of total defense expenditures.

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