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Code Q is nontaxable combat pay. In TaxAct®, this is entered in box 12 of the W-2.

To enter military wages reported on a W-2:

  1. From within your TaxAct return (Online or Desktop) click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Wages and Salaries in the Federal Quick Q&A Topics menu to expand the section and then click Wage income reported on W-2
  3. Click +Add Form W-2 to create a new copy of the form or click Review to review a form already created 
  4. Enter the Employer's information and click Continue
  5. Continue to the screen titled W-2: Enter your employer's information. In the Box 12 - Letter code field, select Q-Nontaxable combat pay from the drop-down menu and enter the amount reported.

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