According to the IRS you can include military BAH as income for EITC purposes. How do you do this in TurboTax? I can not find the option anywhere?

Forum|Forum|3 years ago
February 11, 2023
1 reply
1 view

BAH is a non-taxable housing allowance for military personnel. This is NOT related to non-taxable combat pay.

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ErnieS0

Level 15

You can’t include Basic Allowance for Housing as earned income for purposes of the Earned Income Tax Credit.

IRS says when figuring your earned income for purposes of the EIC, don't include any of these amounts.

Basic pay or special, bonus, or other incentive pay that is subject to the combat zone exclusion (unless you make the election described earlier under Can I treat my nontaxable combat zone pay as earned income).
Basic Allowance for Housing (BAH).
Basic Allowance for Subsistence (BAS).
Any other nontaxable employee compensation.
Interest and dividends.
Social security and railroad retirement benefits.
Certain workfare payments.
Pensions or annuities.
Veterans' benefits (including VA rehabilitation payments).
Workers' compensation.
Unemployment compensation.
Alimony and child support.

See What’s is included in my earned income for EIC

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chastitymmontesAuthor

Level 2

I’m seeing conflicting information from what you provided on the IRS website:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/military-and-clergy-rules-for-the-earned-income-tax-credit

This page was last updated on January 27th, 2023 so it seems very recent. It says you don’t have to include it but you can include it as income for EITC purposes.

DMarkM1

Level 15

The link you reference shows a definition of military non-taxable pay. However in the links provided by @ErnieS0 you will see that only "Nontaxable Combat Pay" may be used to qualify for the Earned Income Tax Credit.

The amount that may be added to your earned income is coded "Q" in box 12 on your form W2. If there was an amount coded "Q" on your form W2 then the Earned Income Tax Credit Topic will ask if you wish to include this income in calculating the credit.

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