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.

If you have additional inquiries, you may submit them to the Questions, Comments, or Request form.