RSS Feed

Discharged With Severance Pay – Tip #7 – Get Your Money Back From IRS

Posted on
IRS building on Constitution Avenue in Washing...

IRS building on Constitution Avenue in Washington, D.C.. (Photo credit: Wikipedia)

 

How to Recoup Taxes Paid on Disability Severance pay From the Armed Forces

 

Many medically discharged vets, including some good friends of mine, don’t know they are entitled to get the taxes back if they get a VA rating. The one’s who do know they are entitled (like I did) don’t know how to go about doing it. If I can spare anyone what I went through trying to figure it out, its worth it.

 

Dorothy IRS publications 17 (Your Federal Income Tax) & 525 (Taxable & Non-taxable Income, page 17)

 

Who is eligible? According to page one of an information paper published online by the Presidio of Monterey Staff Judge Advocate, veterans who have: a designation of 10 a, b, or c on DA Form 199 (findings from the Physical Evaluation Board).

 

 

The rest of this page will deal with the last situation – a retroactive disability determination from the VA. (Information Paper). This last one means the VA has awarded a disability rating for the same condition for which someone is discharged. This paper has limitations, and it is difficult to read. It basically states that the veteran needs to:

 

Get a VA disability rating for the same condition for which they received a discharge. Request a corrected W-2 from DFAS indicating the non-taxable income. Use that corrected W-2 to file a 1040X for said year. The IRS will return the overpayment of taxes. But, DFAS will not issue a corrected W-2 indicating this non-taxable income unless the request is made within the same year as the original W-2 was issued. Most veterans know it is almost impossible to get a VA disability rating in less than a year.

 

How to get back your taxes paid on lump-sum disability severance pay: Once you have a retrograde VA disability rating:

 

Fill out a 1040X subtracting the lump-sum disability payment from your taxable income.

 

Make reference to Publication 525, Taxable & Non-Taxable Income.

 

Attach the following documentation:

 

a. The enclosed explanation letter, addressed to your IRS Regional Service Center.

 

b. A copy of your VA disability award documentation.

 

c. A copy of your separation orders.

 

d. A copy of your DD-214 (does not have to be notarized)

 

e. A copy of your original W-2 from the year the taxes were paid.

 

f. A copy of your federal tax return from the year the taxes were paid.

 

 

 

Internal Revenue Service. (2007). Your Federal Income Tax for Individuals. Publication 17. (p.50).

 

Internal Revenue Service. (2007). Taxable and Non-Taxable Income. Publication 525. (p. 17).

 

Allan B. Colombo Copyright©2008 Founded 1997

 

 

 

Advertisements

About VetBlogger

Veteran of the Persian Gulf war, husband 17 years, and father to 3 amazing children.

12 responses »

  1. Appreciate this post. Will try it out.

    Reply
  2. Thanks designed for sharing such a nice idea, post is good,
    thats why i have read it completely

    Reply
  3. I am sure this post has touched all the internet users, its
    really really good piece of writing on building up new web
    site.

    Reply
  4. Hi there, I enjoy reading through your post. I
    like to write a little comment to support you.

    Reply
  5. Hi there to every body, it’s my first pay a visit of this blog; this web site consists of awesome and truly fine stuff in support of readers.

    Reply
  6. Nice response in return of this matter with real arguments and describing everything regarding that.

    Reply
  7. This is a topic which is near to my heart… Take care!

    Exactly where are your contact details though?

    Reply
  8. Very nice article, just what I wanted to find.

    Reply
  9. Hi everybody, here every person is sharing these
    kinds of know-how, so it’s pleasant to read this weblog, and I used to pay a quick visit this webpage all the time.

    Reply
  10. Nice post. I was checking constantly this weblog and I’m inspired! Very helpful information specially the closing section 🙂 I deal with such information a lot. I used to be looking for this particular info for a long time. Thank you and best of luck.

    Reply
  11. It’s truly a nice and useful piece of info. I am satisfied that you shared this useful information with us. Please stay us up to date like this. Thank you for sharing.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Cranky Old Crow

Just another WordPress.com site

MOGC

Your one-stop blog for all things related to the military in the greater Chicago area

Homeward

Connecting Compassion to Solutions

hireahero

Service has it's Privileges

Parkview Towers

A Methodist Housing Ministry

twitchy.com

Who Said What

The Patriot Perspective

Helping to Conserve American Libertarian Values and Reestablish Common Sense in Government Since March 2009

Nuffan But A Blog

Where one's love for history and video games collide

Make Art From War™

Build Change at Home

Survival Straps

Strength. Style. Purpose.

Coming Home:

The Veterans Book Project

Home Front

Strong Communities for HM Forces

Off The Base

A space for active duty military members, veterans and their families.

Veterans Village Las Vegas

A temporary housing facility for U.S. veterans and their families

OUR TBI WAR HEROS

SHOW SUPPORT TO WAR TROOPS WITH TRAUMATIC BRAIN INJURIES

VetBlogger

Tips, Tricks, and Money Maneuvers for Veterans

%d bloggers like this: