Why do i owe state taxes from my national guard income mixed in with my civilian job?

Forum|Forum|5 years ago
February 10, 2021
1 reply
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i earned close to 40k this year from my civilian job and i also went on 90 day orders from the national guard, since the national guard is a state job you dont pay state taxes, so why do i owe state taxes

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AmyC

Each state has different laws. If you are correct and your pay is not taxable to your state, then in the federal section, after entering the W2, you had to carefully answer all the questions and mark that it was a military W2.

Please review your W2 entry in federal. You may need to enter state and also mark it as exempt.

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rakkrick

How do you mark some type of income as exempt in the state section? I have been trying to figure out how to force TT to create a schedule M, but to no avail. Illinois does not tax military income, and you have to complete a schedule M to document this when you prepare your return. I have used other programs in the past, and have had the option to manually create a schedule M for state, but TT does not appear to allow this. There is a "military pay exclusion" section for state, but every time I try it (at least half a dozen times so far), it says that after checking, it doesn't appear to apply--which is not correct. So how can I force TT to create a schedule M?

DMarkM1

You are correct. Illinois excludes military pay including National Guard pay. You must be sure when you enter your W2 with military pay that you select Active Duty Military Pay in the follow on pages/question on the page entitled "Let's check for uncommon situations".

Then go to the state interview for IL. After about 3 residency pages/questions you will arrive at a page entitled "Here's the income IL handles differently". The military pay exclusion should be in the blue box. You can also edit that if needed.

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