SOCNET

Go Back   SOCNET: The Special Operations Community Network > General Topics > The Lounge

Reply
 
Thread Tools Display Modes
  #1  
Old 9 April 2019, 20:58
bm2bob's Avatar
bm2bob bm2bob is offline
Been There Done That
 
Join Date: Jun 2009
Location: the Road to Happy Destiny
Posts: 1,442
Tax question

So a former shipmate sent me a Facebook message saying that under a new interpretation of IRS rules from 2016. He said that a military retiree could not pay taxes on their retirement based on your percentage of disability.

Like if I was 70% disabled I wouldn’t have to pay taxes on 70% of my retirement.

Can anyone confirm and/or explain this?

I know I don’t pay taxes on my disability.
__________________
...the sea's in my veins...my tradition remains..."
Mother Mother Ocean, I have heard your call..."

Fair Winds and Following Seas SOTB & Cass
Reply With Quote
  #2  
Old 9 April 2019, 22:02
MacDuff's Avatar
MacDuff MacDuff is offline
Confirmed User
 
Join Date: Feb 2008
Location: Frankfort, KY
Posts: 862
Quote:
Originally Posted by bm2bob View Post
So a former shipmate sent me a Facebook message saying that under a new interpretation of IRS rules from 2016. He said that a military retiree could not pay taxes on their retirement based on your percentage of disability.

Like if I was 70% disabled I wouldn’t have to pay taxes on 70% of my retirement.

Can anyone confirm and/or explain this?

I know I don’t pay taxes on my disability.
I've done a quick review of this and it seems that you're able to exclude an amount equal to the amount of your VA disability pay. So if you're 70% disabled, you can exclude an amount equal to 70% disability pay from the VA from your income, so long as your retiree pay is greater than that amount.

Does that help?
__________________
Drinking from a firehose...
Reply With Quote
  #3  
Old 10 April 2019, 04:47
bm2bob's Avatar
bm2bob bm2bob is offline
Been There Done That
 
Join Date: Jun 2009
Location: the Road to Happy Destiny
Posts: 1,442
Quote:
Originally Posted by MacDuff View Post
I've done a quick review of this and it seems that you're able to exclude an amount equal to the amount of your VA disability pay. So if you're 70% disabled, you can exclude an amount equal to 70% disability pay from the VA from your income, so long as your retiree pay is greater than that amount.

Does that help?
Yes it does
__________________
...the sea's in my veins...my tradition remains..."
Mother Mother Ocean, I have heard your call..."

Fair Winds and Following Seas SOTB & Cass
Reply With Quote
  #4  
Old 10 April 2019, 05:24
Steve40th Steve40th is offline
Confirmed User
 
Join Date: Nov 2015
Location: Charleston, South Carolina
Posts: 983
Interesting. Is there a IRS link you can provide? Is this concurrent receipt you are talking about?
Reply With Quote
  #5  
Old 10 April 2019, 07:32
Silverbullet's Avatar
Silverbullet Silverbullet is offline
Administrator
 
Join Date: Aug 2000
Location: Bunker
Posts: 15,532
Quote:
Originally Posted by MacDuff View Post
I've done a quick review of this and it seems that you're able to exclude an amount equal to the amount of your VA disability pay. So if you're 70% disabled, you can exclude an amount equal to 70% disability pay from the VA from your income, so long as your retiree pay is greater than that amount.

Does that help?
Huh? That doesn't make sense. Post a link to the IRS tax regulation.
Reply With Quote
  #6  
Old 12 April 2019, 00:14
hawkdrver's Avatar
hawkdrver hawkdrver is offline
Red Headed Stepchild
 
Join Date: May 2008
Location: AK
Posts: 2,718
https://www.irs.gov/publications/p907

Quote:
VA Disability Benefits
Disability benefits received from the VA should not be included in your gross income. Some of the payments which are considered disability benefits include:

Disability compensation and pension payments for disabilities paid either to Veterans or their families,
Grants for homes designed for wheelchair living,
Grants for motor vehicles for Veterans who lost their sight or the use of their limbs, or
Benefits under a dependent-care assistance program.
If you are a military retiree and receive your disability benefits from the VA, see IRS Publication 525 for more information.
Reply With Quote
  #7  
Old 12 April 2019, 06:11
Steve40th Steve40th is offline
Confirmed User
 
Join Date: Nov 2015
Location: Charleston, South Carolina
Posts: 983
Disability compensation is not taxed at all, for 50% or more compensation.
But If you have 10 to 40% you will effectively not tax 10 to 40% of your retirement check. And the amount of the disability is paid in full or deducted from retirement. Thats part of the concurrent receipt system in play right now. Please correct me if I am wrong, this is what I remember of the concurrent receipt plan.
Reply With Quote
  #8  
Old 12 April 2019, 07:38
Silverbullet's Avatar
Silverbullet Silverbullet is offline
Administrator
 
Join Date: Aug 2000
Location: Bunker
Posts: 15,532
Quote:
Originally Posted by hawkdrver View Post
That's different than the questions asked. Thanks
Reply With Quote
  #9  
Old 12 April 2019, 08:26
bm2bob's Avatar
bm2bob bm2bob is offline
Been There Done That
 
Join Date: Jun 2009
Location: the Road to Happy Destiny
Posts: 1,442
I dug a little deeper myself and I don't think what I asked was accurate. My friend was misinformed. Thank you.
__________________
...the sea's in my veins...my tradition remains..."
Mother Mother Ocean, I have heard your call..."

Fair Winds and Following Seas SOTB & Cass
Reply With Quote
  #10  
Old 12 April 2019, 19:55
hawkdrver's Avatar
hawkdrver hawkdrver is offline
Red Headed Stepchild
 
Join Date: May 2008
Location: AK
Posts: 2,718
Quote:
Originally Posted by Silverbullet View Post
That's different than the questions asked. Thanks
Shit. Sorry. Reread and saw what I missed the first time. Guess that's why we pay a guy
Reply With Quote
  #11  
Old 12 April 2019, 20:47
Fu King Lawyer Fu King Lawyer is offline
Been There Done That
 
Join Date: Jul 2009
Location: ...
Posts: 1,444
You will get a 1099R from DFAS indicating what portion of your military retired pay is taxable
https://www.dfas.mil/retiredmilitary...ittaxable.html
You will not get a 1099 from VA, because your VA disability payments, educational benefits, etc are not taxable.

https://myarmybenefits.us.army.mil/B...sions?serv=122

If you have been awarded back-dated VA disability, or you are getting a back-dated award of CRSC (instead of the CRDP you may have been receiving) you might consider filing amended income tax returns. If you get retro pay, PM me and I'll send you the citations to file with the 1040X (amended tax return(s) for the years your retro pay applies)
v/r
fkl
https://www.irs.gov/individuals/info...n-for-veterans
Reply With Quote
  #12  
Old 12 April 2019, 21:58
MacDuff's Avatar
MacDuff MacDuff is offline
Confirmed User
 
Join Date: Feb 2008
Location: Frankfort, KY
Posts: 862
Quote:
Originally Posted by Silverbullet View Post
Huh? That doesn't make sense. Post a link to the IRS tax regulation.
Sorry, I've been offline for a few days. I might be misreading this, but these are the regs I would cite.

§ 104 (a)(4)

amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country or in the Coast and Geodetic Survey or the Public Health Service, or as a disability annuity payable under the provisions of section 808 of the Foreign Service Act of 1980;

§ 104 (b)(4)

In the case of any individual described in paragraph (2), the amounts excludable under subsection (a)(4) for any period with respect to any individual shall not be less than the maximum amount which such individual, on application therefor, would be entitled to receive as disability compensation from the Veterans' Administration.

I did some more reading after pulling those regs and I wasn't quite right. Those regs do apply to the situation, however it rarely comes into play because most retirees receive both their full VA payment, tax-free, and then that is topped off by the remaining retirement pay. I don't really deal with this on a daily basis, so I'm not all that familiar with the VA disability offset.

That said, I suppose it would be possible to receive only one's retirement pay and then deduct an amount equivalent to your VA disability; it's just an extra step that isn't necessary so no one does it.
__________________
Drinking from a firehose...
Reply With Quote
  #13  
Old 13 April 2019, 01:55
gavin's Avatar
gavin gavin is offline
Unemployed Stunt Double
 
Join Date: Jan 2011
Location: on the road...
Posts: 7,468
I am 60% CRSC...if I opted for CRSC instead of CRDP, I'd lose $300/month.
__________________
Life’s barely long enough to get good at one thing. So be careful what you get good at.
Reply With Quote
  #14  
Old 14 April 2019, 05:22
Polypro's Avatar
Polypro Polypro is offline
BTDT
 
Join Date: Oct 1999
Location: A Noisy Bar In Avalon
Posts: 13,626
The only way you could be taxed on disability, is if it's reported to .gov and you receive some IRS paperwork for it (1099, W2 "like" stuff). I get nothing from the VA other than the usual benefits renewal form (that they still print your full SSN on ) every year. You would have to purposely type it in as additional income (for some insane reason) to be taxed on it.
__________________
What, you want to be part of a choir in an echo chamber? Provocate!
Reply With Quote
Reply

Thread Tools
Display Modes

Our new posting rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On



All times are GMT -4. The time now is 04:35.
Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2019, vBulletin Solutions Inc.
Socnet.com All Rights Reserved
© SOCNET 1996-2018