Pay you earn for service in a combat zone or hazardous duty location is left out of your North Carolina taxable income, as long as it is already excluded from your federal income. You also get an extra 180 days to file your state return, counted from the day you leave the combat zone or the day you are released from hospital care for wounds or injuries you received there. The rest of a resident service member’s military pay is taxed by North Carolina.
There is nothing to apply for. Leave your combat zone pay out of the income you report on your North Carolina return, and file within the 180 day window if you are using the extension.
Your Leave and Earnings Statements or orders showing your combat zone or hazardous duty service dates.
