You are correct that Illinois deducts Military Pay from IL Taxable Income.
The instructions for IL Schedule M say:
"Line 21 — Military pay earned Enter the amount of military pay that you received from the U.S. Armed Forces or the National Guard of any state, or that you received as a dual status military technician. You may not subtract the following: combat pay that is not included in your federal adjusted gross income, Form IL-1040, Line 1 pay you received under the Voluntary Separation Incentive, from the military as a civilian, under the Ready Reserve Mobilization Income Insurance Program, or for duty as an officer in the Public Health Service. "
If you are not able to enter the amount of Military Pay as as 'Subtraction from Income', in your IL return, go back to the W-2 entry in your Federal return to be sure that military pay is indicated on your entry.
Also, check the My Info section to be sure you indicated your husband is in the military.
Click this link for IL Schedule M Instructions.
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