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Is my military pay taxable on my individual income tax return?

Answer #100 -- ( Published 08/05/2005 09:50 AM | Updated 07/12/2017 10:41 AM )

Is my military pay taxable on my individual income tax return?

You may subtract tax-exempt military pay that is in your AGI, including

  • pay for duty in the armed forces, including basic training;
  • pay for duty as a cadet at the U.S. Military, Air Force, and Coast Guard academies, as a midshipman at the U.S. Naval Academy, or in ROTC; and
  • pay for duty for serving in the U.S. Armed Forces Reserves or a National Guard unit, including a National Guard unit of another state.

Note: For tax years ending prior to December 31, 2001, you may only subtract compensation paid for active duty.

Note: For tax years ending prior to December 31, 2007, you may subtract National Guard pay only if you were in the Illinois National Guard.

You may not subtract:

  • certain combat pay that is not included in your adjusted gross income, Line 1;
  • pay you received under the Voluntary Separation Incentive;
  • pay you received from the military as a civilian;
  • pay you received under the Air Force Voluntary Separation Incentive Plan (VSP);
  • payments you made under the Ready Reserve Mobilization Income Insurance Program; or
  • pay for duty as an officer in the Public Health Service.

You must attach your Form W-2, Wage and Tax Statement, showing your military pay. For more information refer to Publication 102, Illinois Filing Requirements for Military Personnel.

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