Combat Pay Election

If a taxpayer has combat pay listed in box 12a of Form W-2 marked with code Q, and you are preparing a paper return, you may need to prepare two EIC worksheets to determine if the combat pay should or should not be added to your taxpayer's income. If this election is chosen, write the combat pay amount by the EIC line of the payment section of the tax return. Review the earned income credit line on Form 1040, Page 2 —Payments.

If a taxpayer has combat pay listed in box 12 of Form W-2 marked with code Q, the software will determine if the combat pay should or should not be added to your taxpayer's income.