Form W-2 - Combat Pay
1

If you are a member of the U.S. Armed Forces who serves in a combat zone, you may exclude certain pay from your income. You do not actually need to show the exclusion on your tax return because income that qualifies for the exclusion is not included in the wages reported on your Form W-2.

Steps

See Enter or Edit Combat Pay for Calculation of the Earned Income Credit (EIC)

Additional Information

Per IRS Publication 3 Armed Forces' Tax Guide, page 15:

How Do I Report the Combat Pay Exclusion?

Ordinarily, you don't have to do anything for this exclusion to apply. The exclusion will be reflected on your Form W-2. The wages shown in box 1 of your 2019 Form W-2 shouldn't include military pay excluded from your income under the combat pay exclusion provisions. If it does, you will need to get a corrected Form W-2 from your finance office. You can't exclude as combat pay any wages shown in box 1 of Form W-2.

If you elect to report nontaxable combat pay (for the Earned Income Credit calculation, for example), the amount is entered on Form W-2, Box 12 in TaxAct®.