Military members and their families do more than their fair share for this great country and it is time they got a break.
Or a series of breaks – the sad fact is that our leaders tend to treat our military families as disposable once they have served their purpose.
That needs to change and it looks like we are headed in the right direction.
From Military Times:
More than 130,000 veterans are receiving letters on how to apply for refunds of taxes they paid on disability severance pay dating back to 1991 — a minimum of $1,750 per veteran.
While exact estimates were not available, because each veteran’s payout varies, the government could be paying out a minimum of $228 million in tax refunds, if all those eligible file claims.
The eligible veterans will have a year after the date of their letter from the Defense Department to file a claim for the refund, or three years after filing their tax return that reported the disability severance pay, whichever is later. Survivors of those who paid the taxes are also eligible for the refund, which would be paid to the estate of the veteran.
The mailings to 130,062 veterans started on July 9, and are scheduled to be completed by July 20. The letters are being sent by the Internal Revenue Service on behalf of the Defense Department, because the IRS maintains the last known addresses of taxpayers, said Army Lt. Col. David Dulaney, executive director of the Armed Forces Tax Council.
These refunds are the result of a law passed in 2016 — the Combat Injured Veterans Tax Fairness Act of 2016 — which applies to veterans who received this pay dating back to Jan. 17, 1991, with taxes withheld. By law, DSP is not taxable if:
- The DSP is paid for combat-related injuries determined by the military service at the time of separation, or
- The veteran is eligible for disability compensation from the Veterans Affairs department.
Veterans who believe they are eligible for a refund, but didn’t receive a DoD notification letter — and don’t have the required documentation to file a claim for a refund should contact the National Archives, National Personnel Records Center, or the VA.
Of the 300,000 veterans who received the disability severance payment since 1991, DoD identified 130,062 veterans who qualify for the refunds.
The law went into effect in 2017. DoD was able to identify the 130,062 veterans in late 2017, and has been working with the IRS to finalize the process for veterans to file claims for their refunds, Dulaney said.