For the National Guard pay deduction, I get paid $350.88 per month. Do I multiply this by 39 days per day or would my monthly income only count once?

[JohnW152 · Accepted solution]

The instructions for the subtraction aren't very well written or explained, but if you were in the National Guard for the entire year, you'll max out your subtraction using the $3,000 maximum limit.

According to Virginia National Guard Income in the Form 760 Instructions, [t]his amount may not exceed the amount of income received for 39 days or $3,000, whichever is less. 

So, if you were paid $350.88 a month for a full year -- $4,200 and change -- you'd max out at the $3,000 limitation, anyway.

If you were in the guard for less than a full year -- or, had quite a few service days -- it may be a bit more complicated.  You'd take your federal taxable income based on Box 1 of your Form W-2, then divide that by the number of days you were in service.

Then, you'd multiply that per-day amount by 39.  You'd be able to claim either that amount, or $3,000, whichever is less.