Active duty military (1=all) on W2 Screen

[tnslifka]

I'm going to need Intuit to correct what these boxes mean. Military income is taxed very differently in various states. And apparently, in Proconnect, checking this box also means various things.

Example, Illinois does not tax military income. If you check this box and select IL from the dropdown, it recognizes this is IL Resident military income, and puts the amount correctly in the IL credit schedule to not tax the income. 

Nebraska DOES tax resident military income. As does Colorado. If you check this box on those returns and select the correct residency state, it incorrectly puts these wages into the schedule as "Non-Resident Military Wages" and doesn't calculate taxes on the wages, even though taxes are due.

99% of my clients are military families. This is killing me.

[Terry53029]

Military pay is always taxed in the state where they sign up not where they are stationed (there are some exceptions like NY. If they are out of NY the whole year they pay no state tax anywhere). Like you said some states exempt their pay even if they sign up in that state. I think it is up to you to enter it correctly, as I don't see how a program will sort out all the rules. Also the families are taxed differently depending on state

[tnslifka]

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.