income tax, tax breaks — July 10, 2015

Giving Disabled Veterans an Even Break

by Bob Williams

Disabled Veterans

Throughout America’s history, our servicemen and women have had a tough time reentering civilian life after serving in a conflict overseas. And those hurdles can turn into a wall when the returning hero also has a disability from an injury.

Fortunately, there is help.

For starters, the IRS says disability payments disabled vets receive from the Department of Veterans Affairs (the VA) should NOT be included in their gross income. Disability benefits include:

  • Disability compensation and pension payments for disabilities, paid 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
  • Benefits under a dependent-care assistance program

Also, VA payments to hospital patients and resident veterans for services under the VA’s therapeutic or rehabilitation programs are no longer included in income. For more information on this, check out the IRS Ruling 2007-198.

As you can see, a disabled military vet may not have to file a return at all. But sometimes filing may not be necessary but still desirable. Many disabled veterans are eligible for various tax credits, including the Earned Income Tax Credit (EIC), a refundable credit for low- to moderate-income workers and families. Disabled veterans can’t receive the credit if they don’t file.

The VA publishes a benefits booklet every year that provides a comprehensive look at federal benefits for veterans, dependents and survivors.

Veterans can also go online to the VA’s eBenefits portal, where they can apply for benefits online. The site also offers applications for VA Home Loan Certificates of Eligibility, a tool to check on your Compensation & Pension status, and more.

Sign up for more of this.

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