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More Than 133,000 Injured Veterans Eligible For Over $78 Million In Tax Refunds

veterans

As a Veteran and an attorney who works with veterans, I keep my readers informed when any new laws are enacted that will affect veterans.

In 2016, a law known as the Combat-Injured Veterans Tax Fairness Act was passed. This law entitles more than 133,000 injured veterans to tax refunds as far back as 1991. The objective of the law is to ensure that veterans who suffer service-ending combat-related injuries aren’t taxed on the severance payment they receive from Department of Defense (DOD).

The DOD is just beginning to send letters to the eligible veterans with information explaining how to claim the tax refunds. According to an article posted on accountingtoday.com, “The letters will provide an explanation of a simplified method for claiming the refund.”

In addition, the article states that, “The amount of time for claiming the tax refunds is limited, though the law gives veterans an alternative timeframe, one year from the date of the letter from DoD. Veterans who make the claims have the normal limitations period for claiming a tax refund, or they can claim it one year from the date of their letter from the DoD, whichever expires later.”

There are a couple of ways you can claim the refund.

You can either send in a claim based on the actual amount of the disability severance payment received by filling out Form 1040X. You must carefully follow the instructions. Or you can opt for a simplified method which is the easiest way. You simply choose to claim a standard refund amount based on the calendar year in which you received the severance payment. Then, write “Disability Severance Payment” on line 15 of Form 1040X and enter on lines 15 and 22 the standard refund amount listed below that applies:

• $1,750 for tax years 1991 – 2005
• $2,400 for tax years 2006 – 2010
• $3,200 for tax years 2011 – 2016

For more information talk with your tax attorney or visit:
https://www.irs.gov/newsroom/veterans-owed-refunds-for-overpayments-attributable-to-disability-severance-payments-should-file-amended-returns-to-claim-tax-refunds