Special Tax Considerations for Veterans

 

Disabled veterans may be eligible to claim a federal tax refund based on:

 

  • an increase in the veteran’s percentage of disability from the Department of Veterans Affairs (which may include a retroactive determination) or
  • the combat-disabled veteran applying for, and being granted, Combat-Related Special Compensation, after an award for Concurrent Retirement and Disability.

 

To do so, the disabled veteran will need to file the amended return, Form 1040X, Amended U.S. Individual Income Tax Return, to correct a previously filed Form 1040, 1040A or 1040EZ. An amended return cannot be e-filed. It must be filed as a paper return.  Disabled veterans should include all documents from the Department of Veterans Affairs and any information received from Defense Finance and Accounting Services explaining proper tax treatment for the current year.

 

Please note: It is only in the year of the Department of Veterans Affairs reassessment of disability percentage (including any impacted retroactive year) or the year that the CRSC is initially granted or adjusted that the veteran may need to file amended returns.

 

Under normal circumstances, the Form 1099-R issued to the veteran by Defense Finance and Accounting Services correctly reflects the taxable portion of compensation received. No amended returns would be required, since it has already been adjusted for any non-taxable awards.

 

If needed, veterans should seek assistance from a competent tax professional before filing amended returns based on a disability determination. Refund claims based on an incorrect interpretation of the tax law could subject the veteran to interest and/or penalty charges.

Hickey&Hickey is always here to provide the most up to date News & Information to help safeguard your financial future for those who give their all for their country and the general public.  Contact us today for Financial Advice, Tax Prep and Business Consultations (516)998-7410 or by email: Info@hickeyandhickey.com

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About Hickey&Hickey

Hickey & Hickey is not just a Tax, Accounting & Payroll firm we are here to help people become Financially Healthy. Apart from offering financial information online we conduct Seminars geared to individuals and small businesses. Hickey & Hickey no solo prepara taxes, nomina y contauria estamos aqui para ayudarle a mantener su salud economica. Fuera de traerle informacion por internet ofrecemos seminarios al publico, para individuales y empresas.
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