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June 2, 2020
Question

TurboTax says I owe when in my W2, I was in tax free, combat zones. Thats weird. Im in the Navy

  • June 2, 2020
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1 reply

SteamTrain
Employee
June 3, 2020

IF the military recognizes your service in a combat zone, then box 12 of your W-2 will contain a code "Q" and a $$ amount.  Also, box 1 of the W-2 would be reduced lower than box 3 or 5, by at least that $$ amount  (sometimes more for other pre-tax deductions)   .   

Any remaining $$ amount in box 1 of your W-2 is federally taxable income, as-well-as all your other types of income (spouse's income if filing jointly,,,, bank Interest, and perhaps dividends& capital gains...etc).

 

So if your W-2, does not have a box 12, code "Q" & amount that represents your time in the Combat zone, and if box 1 is not reduced, then that is something you need to take up with your military Personnel & Payroll staff to determine why the combat pay is not noted on your W-2, and get a corrected W-2 issued if your currently issued W-2 is incorrect.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*