My reservist pay is not state taxed but is being counted against me.

[IsabellaG]

Which state?

[eterre]

AZ, it says active pay is not taxed but we don't pay state tax on normal drill pay either.

[IsabellaG · Accepted solution]

You are correct, Arizona says that members of the reserves or the National Guard may subtract compensation received for active service as a reservist or as a National Guard member, including pay received for weekend or two-week training periods. 

In your AZ return, subtract your reservist pay in the section for Other Subtractions. See the screenshots below. Type in the description and amount of your reservist pay.