Veterans Who Received Disability Severance Pay May be Eligible for Tax Refund

The U.S. Department of Defense (DoD) will begin the process of notifying veterans who may qualify for a refund of federal taxes they paid on disability severance pay. According to the National Veterans Legal Services Program, there are an estimated 133,000 veterans impacted dating as far back as January 17, 1991.

Veterans who are injured in combat and who are separated from the military receive a one-time lump sum disability severance pay. Under federal law, this payment provided by the DoD is supposed to be non-taxable. Instead, the DoD has wrongly withheld an approximate total of 78 million dollars from qualified veterans.

The Combat-Injured Veterans Tax Fairness Act was passed under the Obama Administration in 2016. Since then, the DoD has been identifying those who received a disability severance pay which was improperly taxed. It is now required that the affected veterans are notified about their refund eligibility, as well as how to file an amended tax return to redeem the withheld amount.

Any veteran who receives a notice from the DoD has exactly one year to file a claim.

Veterans interested in applying for VA Disability Compensation or Social Security Disability with the help of Victory Disability should call 1-866-350-7229. To determine if you are eligible for SSDI benefits, complete the Social Security Disability Evaluation.