It depends. You are correct that Kentucky does not tax active duty military pay, which includes National Guard pay. However, if you have income outside of the Guard, you are taxed on that income. If this is the case, it is possible that you are owing KY tax from that second job. However, there are a couple of entries to check to make sure that TurboTax is not including the Guard pay as income. First, note the following:
-
Sign in to TurboTax Online, click take
me to my return, then pick
up where I left off.
- Click on Wages
and Income, then Edit on your W-2
- Double-check that no KY tax was withheld from your Guard pay.
- Scroll
through the screens until Do
any of these uncommon situations apply? Make sure the Active Military Box is checked. Your KY military pay
should be excluded from your state taxable income. (Screenshot below to assist you)
In addition, Kentucky gives an extra exemption to Guard members on the state tax return for other income they may have earned. Scroll through the Kentucky screens carefully and make sure to select that you are a member of the National Guard to receive that extra exemption.
If you have done both of these, you have done your best to reduce your KY tax liability. If you still owe KY taxes, it would be because a second job did not take out enough to cover the KY tax you owe.
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