1068
Tax Form – If Nontaxable Combat Pay Election (SEQ 1185) is significant, it must equal total
nontaxable combat pay on Forms W-2. On Form W-2, nontaxable combat pay is the amount in
Employer’s Use Amount ) when the corresponding
Employer’s Use Code is “Q”.
Exception – When PYEI Literal equals “PYEI” and Nontaxabe Combat Pay Election
is significant, the prior year nontaxable combat pay amount must be used.
1069 o Form 1040/1040A - When Earned Income Credit and Additional Child Tax Credit (Form
8812) are both significant, and the Hurricane Katrina election to use prior year earned
income is made for one credit, the election must be made for both credits. The election is made when
PYEI Literal of Form 1040/1040A equals “PYEI” and 2004 Earned Income Indicator
of Form 8812 equals “X”.