Yes, you should check the box for "Worked outside the U.S." on the Let's check for uncommon situations screen after you enter your Form W-2. However, because your employer is the U.S. DOD, you will not be eligible for a Foreign Income Exclusion, and there would also not be any foreign taxes paid that would apply toward the Foreign Tax Credit.
TurboTax Expert Assist
Get answers to all your tax questions
Our experts are available on-demand, no appointment needed. Get help all year long with TurboTax Expert Assist.