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The IRS defines a veteran as a former U.S. service member who served on active duty for at least 24 months and who was not dishonorably discharged.
Before you make a decision to file, consider some of the information below.
Disability benefit payments received from the VA aren’t taxable.
This includes:
- Disability compensation and pension payments
- Disability grants for home or vehicle modifications
- Benefits under dependent-care assistance programs
Payments from all GI Bill programs are tax-free.
This is true for you, your dependents, and your survivors.
Tax-free education benefits include:
- Tuition
- Training fees
- Test fees for licenses and certifications
- Money to pay for a tutor
- Books
- Housing
Remember not to include these benefits when filing your income taxes.
Any earned income or wages from a job will still need to be reported to the IRS.
Military Retirement Pay is also considered taxable income to the IRS. However, this pay is considered pension and not wages, so you won't owe the government Social Security taxes on it.
Note: If you're retired and are participating in the Survivors Benefit Plan, your payments are excluded from taxes.
Veterans discharged from military service because of a medical disability may receive a one-time lump sum severance payment.
Disability severance pay is taxable income unless the pay results from a combat-related injury or the veteran receives official notification from the VA approving disability pay.
If you paid taxes on disability pay, you may be entitled to a refund.
If you still have questions or would like to schedule an your free tax prep appointment, call 211 or visit our friends the Miami Tax Pros
Updated as of January 2023.
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