Updated October 24, 2026. Quick answer: Line 21 of the 2025 Illinois Schedule M is a subtraction for military pay earned. The instructions say “Enter the amount of military pay that you received from the U.S. Armed Forces or the National Guard of any state, or that you received as a dual status military technician.” The form adds “Attach military W-2.”
What this line asks
On the form the line is labeled military pay earned, with an instruction to attach the military W-2. It sits in Step 3, which figures the subtractions for Form IL-1040, line 7. The instructions open: “Enter the amount of military pay that you received from the U.S. Armed Forces or the National Guard of any state, or that you received as a dual status military technician.”
Who it applies to
The line is for pay received from the U.S. Armed Forces, the National Guard of any state, or as a dual status military technician. The instructions then list pay you may not subtract, starting with “You may not subtract the following:” The list includes “combat pay that is not included in your federal adjusted gross income, Form IL-1040, Line 1”, and pay received under the programs and duty named in the table below.
Military retirement income is a separate subject from military pay earned. Retirees can read whether Illinois taxes military retirement, whether Illinois taxes pensions and the Illinois line 5 retirement income subtraction.
What the instructions say to enter
| Step | What the instructions say |
|---|---|
| What to enter | “Enter the amount of military pay that you received from the U.S. Armed Forces or the National Guard of any state, or that you received as a dual status military technician.” |
| Combat pay | “combat pay that is not included in your federal adjusted gross income, Form IL-1040, Line 1” |
| Other pay not subtracted | “under the Voluntary Separation Incentive,” “from the military as a civilian,” “under the Ready Reserve Mobilization Income Insurance Program,” |
| Public Health Service | “for duty as an officer in the Public Health Service” |
| More information | “For more information, see Publication 102, Illinois Filing Requirements for Military Personnel.” |
| Attachment | “Attach: Form W-2 showing your military pay.” |
| Dual status | “If you report dual status on Line 21, you must attach both Form W-2 and SF-50, Standard Form 50 (Notification of Personnel Action).” |
The figures the line prints
The line 21 instructions print no dollar amount, percentage or age limit. The only number the instructions point to is a publication for more detail: “For more information, see Publication 102, Illinois Filing Requirements for Military Personnel.”
Where the result goes next
The subtractions in Step 3 are totaled at the bottom of the schedule. The form says of line 42: “Add Lines 33 through 41. Enter the amount here and on Form IL-1040, Line 7.” That carry is covered in the IL-1040 line 7 guide.
Edition and line numbers
This page reads the 2025 Schedule M Instructions (IL-1040) from the Illinois Department of Revenue, the current file served on 2026-10-24. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Subtracting combat pay that is not in federal AGI. The instructions say “combat pay that is not included in your federal adjusted gross income, Form IL-1040, Line 1”
- Subtracting pay from the military as a civilian. The instructions list “from the military as a civilian,” among the pay you may not subtract.
- Filing without the wage statement. The instructions say “Attach: Form W-2 showing your military pay.”
Related: whether Illinois taxes military retirement, Illinois retirement taxes, whether Illinois taxes pensions, and the Illinois line 5 retirement income subtraction.
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Answer againSources
- 2025 Schedule M Instructions (Other Additions and Subtractions for Individuals), Illinois Department of Revenue: tax.illinois.gov
- 2025 Schedule M Other Additions and Subtractions for Individuals, Illinois Department of Revenue: tax.illinois.gov
Read from the state revenue documents linked above on October 24, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.