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 Wage and Tax Statement.
See Enter or Edit Combat Pay for Calculation of the Earned Income Credit (EIC) for more information.
Per IRS Publication 3 Armed Forces' Tax Guide, on page 14:
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 2020 Form W-2 shouldn't include military pay excluded from your income under the combat zone 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 zone pay any wages shown in box 1 of Form W-2. See also Disability Severance Payments to Veterans, later, for special rules relating to severance pay.
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®.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.