The State of Illinois allows a subtraction from income for certain military pay earned, which is claimed on Schedule M.
Per the Instructions for the Schedule M, page 3:
Line 20 - Military pay earned
Enter the amount of military pay that you received from the U.S. Armed Forces or the National Guard of any state, or that you received as a dual status military technician.
You may not subtract the following:
- combat pay that is not included in your federal adjusted gross income, Form IL-1040, Line 1
- pay you received
- under the Voluntary Separation Incentive,
- from the military as a civilian,
- under the Ready Reserve Mobilization Income Insurance Program,
- for duty as an officer in the Public Health Service
For more information, see Publication 102 Illinois Filing Requirements for Military Personnel.
Attach Form W-2 showing your military pay.
To enter this in TaxAct:
- From within your TaxAct return (Online or Desktop) click the State tab and then click Illinois directly below the tabs
- Expand Income and click Subtractions
- The program will proceed with the interview questions for you to enter or review the appropriate information
- Answer Yes to the question: Would you like to enter the other subtractions from income Illinois Schedule M?
- Click Continue once
- Enter the amount in the field Military Pay Earned at the bottom of the screen.