Typically, the reason the military discount is not applied is not identifying the W2 as "Active Military Pay" (steps 9-10 below).
To make sure you touch all the bases, verify you meet the qualifications. The TurboTax Free Miliary filing is for:
- Active duty and reservists of an enlisted rank
(E-1 through E-9) with a W2 from DFAS
- Excludes National Guard members
- Excludes TurboTax Live products
If you fall into the above category follow these steps to trigger the discount.
- In the "My Info" section
- Edit your personal information
- Indicate your military status (Active/Reserve)
- Indicate an "Enlisted Pay Grade"
- Continue to complete the section
- Next in the federal "Wages & Income" section
- Edit your military W2
- Verify/enter the form information
- In the follow on page asking about "Uncommon Situations"
- Select "Active Military Pay" from the list
- Continue to complete the section
- The discount will be applied when you are ready to file
FYI, your spouse can simply choose to make her resident state the same as yours so that she falls under MSRRA. That way you both would typically only be taxed by the one resident state as a military couple. In the "My Info" section indicate the same resident state for both of you and answer "No" neither of you lived in another state.
If there were taxes withheld from another state, you would typically file a nonresident return to get those taxes refunded. Still in the "My Info" section scroll down to "Other state income" and answer "Yes" you earned income in another state and select the appropriate state. This will generate a nonresident return.
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