Update: Wisconsin did update its treatment for active duty military pay beginning with the 2021 tax year Refer to the answer by awesome Tax Expert @DanaB27 in Wisconsin - US Armed Forces Active duty pay.
Dana cites:
"If you were a member of the U.S. Armed Forces, you may subtract the amount of basic, special, and incentive pay received from the federal government under 37 USC chapters 3 and 5 while on active duty. Members should refer to their Leave and Earning Statements (LES) and military orders to determine the pay eligible for the subtraction."
Please see WI Pub 128 page 9 for details.
@Dugall
Wisconsin does not allow a subtraction from normal military pay.
The subtraction only applies to members of the Reserves or National Guard who are called into active federal service. The screen in TurboTax says Reserve or National Guard Member Adjustment.
Wisconsin does follow federal rules that exclude some income, such as combat pay. These federal excluded amounts are not included in Box 1 of your W-2 so there is no additional subtraction on the Wisconsin return.
If you are regular military, Wisconsin taxes the same pay as federal.
See Individual Income Tax Military
Thank you for your service.
Edited 02/28/22 | 09:53 PT
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