Nontaxable combat pay is generally reported on Form W-2 in Box 12 with code Q. 

Steps

See Editing in Program - Form W-2.

After entering the amount in Box 12 of the Form W-2 you received, you must indicate the combat zone:

1. Click Federal (on smaller devices, click in the upper left-hand corner, then choose Federal)
   
   
2. Expand Miscellaneous Topics and choose Combat Zone.
   
   
3. On the E-filing - Military Service screen, choose the area served for the current tax year.

This data will then transfer to the Electronic Filing Worksheet, and will allow electronic filing if the withholding is greater than 50% of the wages.