First, are you serving outside of Pennsylvania? Your military income is taxable if you are serving on active duty inside Pennsylvania. Please see the PA website.
Next, assuming that you are serving outside Pennsylvania, please look at the following:
In the Personal Info section:
- Did you enter "Pennsylvania" as your residence?
- Did you indicate that you were military?
- Did you indicate that you were active duty on December 31, 2019 and answer the other questions that pop up related to be in the military?
In the Pennsylvania interview, not that you must manually indicate that your military pay is not taxable.
Navigate to the screen with the title "Compensation Summary". Note that your W-2(s) are listed in a table at the bottom.
Also note the statement just above this: "Income earned by residents who are called to active military duty is exempt from Pennsylvania taxation. You will need to edit the entry and mark it as non-taxable to Pennsylvania."
If you entered a W-2 and earned that money while on active duty out-of-state, click on the Edit link for that W-2.
This will show a new screen in which you are asked if the entire income is excluded or just part of it. Following the instructions, and any military pay earned while serving on active duty outside Pennsylvania will be excluded from Pennsylvania tax.
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