It's not always taxed in their home state though, that's my point. Sometimes their home states do not tax military income. Like my example, if I'm filing an Illinois state return, I have to select that the W2 is military income so it knows NOT to tax the military income in Illinois. If I'm filing a return in Colorado, where Colorado DOES tax military income, that box makes it non-taxable non-resident income, even though the income isn't non-resident income and should be taxed in Colorado.