The STATE on my W-2 is "AE". In the choices of state abbreviations it does not list "AE" as a state. "AE" is a valid Military adddress.

[DoninGA]

In the address section, on the box labeled Type of mailing address select from the dropdown Military (APO, FPO,  or DPO)

The State Code box now will have AE 

[DianeW777]

The following steps will allow you to select the 'AE' as one of the choices for your military address.

• To select AE in the state field for military addresses in  TurboTax:
  1. Navigate to the personal info section and select Military (APO, FPO, or DPO) as the address type. 
  2. Under state/state code, choose AE (Armed Forces Europe, Middle East, Africa, and Canada) 
  3. From the dropdown, then enter the APO/FPO city designation and military zip code. 

@skjarzo