This isn't a tax site, but I think it may give you some answers.
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Military Retirement-Concurrent Receipt
Can anyone enlighten me if the amount of a military retirees' retirement pay called Concurrent Receipt is non-taxable. This is not the amount they receive from VA as Disability Benefits which is totally non-taxable and they receive no document for tax purposes for. Up until 2004 their retirement pay was reduced by the amount they received for VA disability. From that time on, if their VA disability is 50% or more they receive the VA disability in addition to the retirement pay (phased in over 10 year period). I have been approached by a customer who says he is entitled to a refund from the IRS for the taxes he paid on the portion of his military retirement which is on a 1099-R he receives that is considered concurrent receipt, now called CRDP. In fact several of his friends have filed amended returns and received refunds. He has showed me an amendment that was prepared taking the amount of his retirement pay 28,000 and multiplying it by 90% which is the percent of his VA disability and saying this is not taxable. I have never been aware of anything like this and do returns for a lot of retirees so if this is the case I need to know. I don't think it's correct as I cannot find anything about this. To my knowledge whatever is on the 1099-R for the military retirement is taxable. Seems to me if any of it was not taxable the government would have already taken that into account when they issue the 1099-R. Any help on this issue would be appreciated.
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