Veterans: The IRS May Owe You Money, For A Change

On the day of President Trump’s historic meeting with Russian President Putin, the Pentagon announced that about 130,000 veterans could be eligible to receive a refund for taxes they paid on disability compensation that shouldn’t have been taxed.

The veterans in question received Disability Severance Pay for combat-related injuries, or the Department of Veterans Affairs determined they were eligible to be compensated for a service-related disability, defense officials told reporters on Monday. They are currently receiving letters from the Internal Revenue Service on behalf of the Pentagon notifying servicemembers that they could receive a refund.

The letters include the amount they received in Disability Severance Pay, which they can include on tax Form 1040X to file their claims, said Army Lt. Col. David Dulaney, executive director of the Armed Forces Tax Council.

Most of the veterans received a disability rating from the VA after they had already paid taxes on their Disability Severance Pay, Dulaney said at a media roundtable. The IRS had put the onus on taxpayers to ask for a refund in such situations, but in December 2016 Congress passed a law requiring the Defense Department to notify veterans that they may be eligible to be reimbursed for taxes withheld between 1991 and 2016.

https://taskandpurpose.com/veterans-the-irs-may-owe-you-money-for-a-change/