If Michigan is your Home of Record and your state of legal
residence on your LES, you are required to file a Michigan resident income tax
return MI-1040,
regardless of where your income is earned. Military pay is exempt from
Michigan tax. However, most interest, dividends, capital gains
and other income received is subject to Michigan income tax. You should
file an MI-1040, Schedule
1 and Schedule
W and subtract your military pay, to the extent it is
included in federal adjusted gross income (AGI).
The Michigan exclusion is taken in the Federal section of
TurboTax by marking your military W-2 as active duty income:
- Once in your
tax return, click on Federal Taxes tab
- Click
on Wages & Income
- Click Edit next
to your military W-2
- Click Continue on
the W-2 entry screen to get to the screen titled "Do any of
these uncommon situations apply to this W-2?
- Click the box
to the left of Active duty military (see screen shot below)
Michigan return:
As you walk through your Michigan return, watch for a screen
titled "Deduction for Military Pay". It should state that your military
income is not taxable. (see
screen shot)
Once simple way to check that your military wages have been
subtracted from Michigan taxable income (if you don't have any other
subtractions) is to click on My
Account on the blue dashboard
and choose Tools. Under Other helpful links.... click View Tax Summary. Click MI Tax Summary (in gray) under My Account. Your military wages should show next
to Michigan Subtractions.
