**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

1cris4me

Can you specific rule or regulation in IRS code exempts which Vets receiving disability payments from filing tax returns?

1cris4me

Can you specific rule or regulation in IRS code exempts which Vets receiving disability payments from filing tax returns?

Carl11_2

Employee

There is no rule that exempts vets with a 100% disability from filing a tax return. Never has been either. But as I'm sure you already know, all disability pay you receive from the VA is not taxable or reportable on any tax return. Not ever. So if disability pay is your only source of income for the entire year, then you don't need to file a tax return at all.
But if you receive any income during the year from other sources, then depending on the type of income as well as the amount of that income, you could be required to file a tax return. But even then, you would not include your VA disability pay on that return.

Carl11_2

Employee

If the only source of income to be reported on a tax return is income received from the veterans administration and/or social security (SSA-1099), then you don't need to file at all. However, if you do have reportable income, the VA pay is not reportable and is not included on any tax return.

karajora2

Now how do i change last years they want 50 bucks 4 copy

Jerryw6313

I have been 100% disabled since 2012 . Is it possible to amend those returns from the past?

KarenJ2

Please see this great answer by TurboTax Doninga:

If you have Social Security Disability payments, they would be reported on a federal tax return, however, if Social Security is the only income that you would be reporting, a federal tax return does not have to be filed. However, if you do have any other income to report, then enter the benefits reported on SSA-1099. VA disability payments are not reported on your return.

To enter your Social Security benefits reported on form SSA-1099

Click on Federal Taxes (Personal using Home and Business)
Click on Income and Expenses (Personal Income using Home and Business)
Click on I'll choose what I work on
Scroll down to Retirement Plans and Social Security
On Social Security (SSA-1099, RRB-1099), click the start or update button

[Edited 01.26.18 / 2:56pm]

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KarenJ2

Please see edited response.

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bama_777

The 525 Law allows 100% VA Disabled veterans from having to pay federal income taxes on Military Retirement Pay and the VA Pension. I had to file 2 amended tax returns this year because Turbo Tax did not recognize this law...cost me $950 to have a tax professional to refile my returns. I have used Turbo Tax for 7 years, not sure I will use it anymore if they do not have the 525 Law in their software. I am 100% VA Disabled and Turbo Tax makes me pay Federal Income Tax on my Military Retirement Pay...causes me to owe at the end of the year. This should not happen - is the Turbo Tax software updated this year?

DMarkM1

Since you are 100% VA rated you should be receiving your military retirement pay and VA disability pay (concurrent receipt). Your VA disability under Publication 525 is not taxable. However your military retirement is taxable under Publication 525.

Here is a link with discussion on the topic. If you are not receiving disability pay but only military retirement pay and you had a 100% disability rating then you would exclude your retirement pay from taxable income under Publication 525 rules.

The DoD and VA should have automatically changed your pay when the concurrent receipt laws passed in 2003. You should therefore be receiving a form 1099-R for your retirement pay which is entered into TurboTax and taxable. You VA disability pension is not reported on any tax forms and does not go on your tax return at all.

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S Stout

DMarkM1,

I have read your March 2, 2020 response a few times and understand your point that retirement pay is taxable. However, I have several retired friends that state your answer is not true. Both have filed W-4's with DFAS stating in block 4(c), "Exemption for 100% Disabled Veteran." Both confirmed that DFAS received, processed their W-4's and stopped their tax withholdings.

Again, I have personally read both IRS publications 524 and 525, but I cannot find in either where it states, 100% disabled veterans retired pay "will not" be taxed. However, on page 18 of 525, it does state, "Service-connected disability. You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services."

Could you please direct me to the source(s) where you got your information. In my opinion, both IRS publications are vague and subjective.

Thanks in advance for your response.

Tophat827

I am drawing 100% VA disability do I still have to file taxes and if not how do I get my tax refund

DoninGA

Employee

@Tophat827 wrote:

I am drawing 100% VA disability do I still have to file taxes and if not how do I get my tax refund

Your VA disability benefits are not reported on a tax return, so if that is all the income you receive there is no reason to file a tax return.

If the VA benefits are all the income you receive, what tax refund are you referring to? If you do not have taxable income with taxes being withheld from that income there cannot be a tax refund.

Robertcraig

Should a 100% disabled veteran file a tax return

DoninGA

Employee

@Robertcraig wrote:

Should a 100% disabled veteran file a tax return

If the VA disability income is the only income you receive then there is no need to file a tax return. However, if you did not receive the 3rd stimulus payment of $1,400 in the March - May 2021 timeframe then you should file a return for the Recovery Rebate Credit of $1,400.

Yawata

I am an Army retiree with 100% service connected disability.

I am receiving Army retirement pay as well as VA compensation amounting $3517.84 per month. My question is with regard to my military retirement pay. My Army retirement pay has been taxed by both Federal and State income taxes. It was my understanding that any service connected disability would entitle income tax exemption from both federal and state. Do I understand the tax law incorectly? Please straighten me out.

Thank you

TomD8

Employee

@Yawata--

Military retirement pay based on age or length of service is considered taxable income for federal income taxes. Whether it is subject to state income tax depends on the laws of your state.

VA disability compensation is exempt from federal income tax.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

Yawata

You are perfectly correct in your response but didn't answer my question. My question concerns a military retiree who was awarded 100 % service connected disability. Is my military retirement pay subjected to Federal Income Tax? I understand that a military retiree who was awarded 30% disability is given a 30% relieffrom the Federal Income Tax and taxed only 70% of the retirement pay. What about a military retiree with 100% service connected disability? Is he given 100% relief from the Federal Income Tax?