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Should I be charged IL state tax on military income? I typically have not been in the past but it is showing I owe for state tax. Only income is military.

 
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1 Reply
ToddL99
Expert Alumni

Should I be charged IL state tax on military income? I typically have not been in the past but it is showing I owe for state tax. Only income is military.

No, you do not have to pay IL state tax on your military income. See Military Pay - Illinois for this situation.

 

To ensure the program is treating your military pay correctly for state tax purposes,  in the My Info Personal Interview: 

  1. Select Illinois as your state of residence; 

  2. Answer "No" when asked if you "Lived in another state in 2020?" That question only applies if you changed your state of residence in 2020. 

  3. When asked if you "Earned money in another state?", answer "No" (unless the military member had non-military income in the state where you are stationed). 

Also, make sure of these entries on your W-2:

  1. Sign in to TurboTax Online, click take me to my return, then pick up where I left off.
  2. Click on Wages and Income, then Edit on your W-2
  3. Scroll through the screens until Do any of these uncommon situations apply?  Make sure the Active Military Box is checked.  Your military pay will be correctly processed for your state of record. 

 

The following post provides additional detail  On military income do I have to pay taxes in Illinois?

 

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