1. Short title This Act may be cited as the Federal Employee Combat Zone Tax Parity Act . 2. Exclusion from gross income for certain combat zone compensation of civilian employees of the United States (a) In general Section 112 of the Internal Revenue Code of 1986 (relating to certain combat zone compensation of members of the Armed Forces) is amended by adding at the end the following: (e) Civilian employees (1) In general Gross income does not include so much of the compensation as does not exceed the maximum amount specified in subsection (b) for active service as an employee of the United States for any month during any part of which such employee— (A) served in a combat zone, or (B) was hospitalized as a result of wounds, disease, or injury incurred while serving in a combat zone, but this paragraph shall not apply for any month beginning more than 2 years after the date of the termination of combatant activities in such zone. (2) Definitions For purposes of this subsection— (A) Employee The term employee has the meaning given such term by section 2105 of title 5, United States Code. (B) Active service The term active service means active Federal service by an employee. . (b) Conforming amendments (1) The heading for section 112 of such Code is amended to read as follows: 112. Certain combat zone compensation of members of the Armed Forces and civilian employees of the United States . (2) The item relating to section 112 in the table of sections for part III of subchapter B of chapter 1 of such Code is amended to read as follows: Sec. 112. Certain combat zone compensation of members of the Armed Forces and civilian employees of the United States. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.