VA Disability Pay- Taxable or Not

[Taxman VA]

Normally, if the taxpayer pays for the plan the disability pension payments are not taxable. However, in the case of a VA disability plan does this change the outcome?

Let me know.

Thanks,


Taxman VA

[DaveO]

As long as the pay is based on % of disability and not years of service it is non-taxable and non-reportable. It did have an impact on one of the stimulus payment deals a few years ago but otherwise has no bearing on the return.

[Burke]

Normally, if the taxpayer pays for the plan the disability pension payments are not taxable. However, in the case of a VA disability plan does this change the outcome? Let me know.Thanks,Taxman VA

Need to know if you are referring to the State of VA or Veterans Adminstration?

[Taxman VA]

VA Disability

Thanks DaveO for your reply!

Bob's VA entitlements are the result of partial disability during his Air Force Active Duty service. He did not pay for this coverage.

Above is the clients reply to my inquiry regarding taxability of VA Disability.

It would appear that this is a partial entitlement like you mentioned in your reply so non taxable.

Thanks again,

Taxman VA

[Taxman VA]

VA Disability Taxable

Thanks for your reply.

Bob's VA entitlements are the result of partial disability during his Air Force Active Duty service. He did not pay for this coverage.

Above is the clients response to my inquiry.

Does this response lead you to these payments being non taxable?

Let me know.

Thanks,

Taxman VA

[erchess]

I think it's not taxable

but the client likely has a phone number at the VA you could call for verification. Then there is the fact that unless 2011 was the first year he got this money you could check prior year returns. We all know that while information documents (W-2s, 1099s etc) can be wrong the are much more often correct and especially likely to be correct as to whether they should be issued at all to that person that year. It doesn't sound as though anything relevant has changed unless as I say he just started this income stream in 2011.