DAF Form 1089: Leave Settlement Option Guide (2026)

DAF Form 1089: Leave Settlement Option Guide (2026) – If you’re an Air Force or Space Force service member preparing for reenlistment, a first enlistment extension, or the end of a tour, DAF Form 1089 (Leave Settlement Option) is a critical document. It lets you decide whether to receive cash payment for accrued leave, carry it forward, or settle a portion of it.

This official Department of the Air Force form helps document your election and ensures compliance with leave policies under DAFI 36-3003, Military Leave Program. Understanding it can maximize your benefits and avoid surprises in your pay or leave balance.

What Is DAF Form 1089?

DAF Form 1089, previously known as AF Form 1089, is titled “Leave Settlement Option.” It records a service member’s choice on handling accrued leave during specific career events:

  • Reenlistment
  • First voluntary extension of enlistment
  • End of certain Reserve Component tours (e.g., MPA/RPA)

Purpose (per Privacy Act Statement): To document your decision on selling all, part, or none of your leave in conjunction with reenlistment or first extension. Disclosure is voluntary, but not providing it may delay processing.

The form includes sections for identification data, leave settlement elections, MPS (Military Personnel Section) verification, and member signature. Previous editions (e.g., 20120905) remain relevant unless updated.

Official Download: DAF Form 1089 PDF

Key Leave Settlement Options on DAF Form 1089

You typically mark one of these (initial or check the box):

  • A. Cash Settlement for All of My Accrued Leave — Receive payment for your entire balance (subject to limits).
  • B. Carry Forward All of My Accrued Leave — Keep the leave for future use.
  • C. Cash Settlement for ___ Days — Sell a specific number of days.

Important Acknowledgments on the Form:

  • You cannot sell more than 60 days of accrued leave across your entire military career (with limited exceptions for Special Leave Accrual).
  • Once you reenlist or enter the extension (within certain windows), you generally cannot change your election.

For Reserve Component members ending an MPA/RPA tour, additional rules apply regarding non-excepted leave and contingency operations.

Air Force & Space Force Leave Basics (2026 Updates)

  • Accrual: 2.5 days per month of active duty.
  • Standard Carryover Cap: 60 days into the next fiscal year (use-or-lose applies after Sept. 30).
  • Special Leave Accrual (SLA): Allows higher balances in certain deployments/contingencies. Recent updates reduce the combined cap (regular + SLA) to 90 days starting FY27, with a one-time sell-back option for enlisted members up to 30 days of excess SLA (counts toward career 60-day limit).
  • Sell-Back Payment: Based on basic pay only (no BAH or BAS). Taxes apply (typically 25% federal withholding plus state taxes).
  • Career Limit: Maximum 60 days sold back lifetime (exceptions for certain SLA or separation scenarios).

Enlisted members can sell back at reenlistment or separation (honorable conditions). Officers are more limited, primarily at separation/retirement.

When Do You Use DAF Form 1089?

  1. Reenlistment — Elect settlement in conjunction with your new contract date.
  2. First Enlistment Extension — Only on the first extension; later ones generally prohibit selling leave.
  3. Reserve Component Tours — At the end of qualifying active duty periods.

Pro Tip: Verify your current leave balance in LeaveWeb before deciding. Consult your MPF or finance office, especially if in advance/excess leave status.

Step-by-Step: How to Fill Out DAF Form 1089?

  1. Section I (Identification): Enter name (Last, First, MI), grade, SSN, unit, duty phone, ETS/DOS.
  2. Section II or III: Select your reenlistment or extension date and mark your choice (A, B, or C).
  3. Read Acknowledgments: Understand career limits and irrevocability.
  4. MPS Verification: Remarks and signature from personnel.
  5. Member Signature & Date.

Submit through your unit or MPF. Digital/fillable versions are available on official sites.

Should You Sell Leave or Carry It Forward?

Sell Leave If:

  • You need immediate cash (e.g., for a PCS move or debt payoff).
  • Your balance risks use-or-lose (especially with SLA changes).
  • You’re separating soon and won’t use it.

Carry Forward If:

  • You plan to take leave later (e.g., terminal leave).
  • You want to maximize rest and family time.
  • Future deployments might generate more SLA.

Financial Note: Selling leave provides taxable income but doesn’t include allowances. Taking terminal leave lets you use time off while still on payroll with full benefits.

Common Questions About DAF Form 1089

Can I change my mind? Generally no, once the action (reenlistment/extension) is processed.

What about terminal leave at separation? Form 1089 is primarily for reenlistment/extension; separation sell-back is handled differently but still counts toward the 60-day career limit.

Reserve/Guard specifics? Additional rules for carryover and sell-back on long tours. Check with your RIO or servicing MPF.

Get Help and Stay Compliant

Contact your local Military Personnel Flight (MPF), Finance Office, or Career Development section for personalized counseling. Always reference the latest DAFI 36-3003 (updated February 2026) on e-Publishing.af.mil.

Proper use of DAF Form 1089 ensures you make informed decisions about one of your most valuable military benefits—time off and associated compensation.

This guide is for informational purposes based on official DAF sources as of 2026. Policies can change; verify with your chain of command or MPF for your specific situation.