See the answer below for how to file PA state tax when active duty and exempt. I have also included two screenshots below that show the screens referred to in the answer. Active duty military income earned outside of Pennsylvania by a Pennsylvania resident is not subject to Pennsylvania income tax. In the state section of TurboTax, when you come to the page titled “Compensation Summary”, click edit beside your military income. Check the box to indicate that this income is not taxable to Pennsylvania. This will flag your military income as not taxable in Pennsylvania. However, any interest, dividends, capital gains, rental income, etc IS taxable by PA regardless of where you are stationed. If you have already e-filed, you can submit copies of your military orders and an explanation of where you earned your active duty pay to: PA Department of Revenue Electronic Filing Section P.O. Box 280507 Harrisburg, PA 17128-0507 Or FAX to: 717-772-4193 Please make sure your Social Security number is on your orders.
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