Menu Path: Income > Common Income > Wages (W-2)
Enter your combat pay on the Wages (Form W-2) screen.
Nontaxable combat pay should be shown in Box 12 of your W-2 with code Q next to it. In Box 12, select Q: Nontaxable combat pay in the code drop-down and enter the nontaxable combat pay in the amount box. If you are eligible for the Earned Income Credit or the Additional Child Tax Credit, we'll automatically use the nontaxable combat pay if it increases either one of those credits. If it doesn't increase those credits, it will not be used.