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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29495
Experience:  Taxes, Immigration, Labor Relations
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Do You know of a tax law that exempts military retirement pay

Customer Question

Do You know of a tax law that exempts military retirement pay from federal taxes if the service member is
rated at 50 disability
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome to Just Answer!

Military retired pay is subject to Federal taxes. If your retirement pay is based on age or length of service, it is taxable and must be included in your income as a pension on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A.
Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the Department of Veterans Affairs (VA).

If based on your disability - you would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) – that amount is not taxable - Conditions for exclusion. Do not include the disability payments in your income if any of the following conditions apply.

1.You were entitled to receive a disability payment before September 25, 1975.

2.You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975.

3.You receive the disability payments for a combat-related injury. This is a personal injury or sickness that

  • Results directly from armed conflict,
  • Takes place while you are engaged in extra-hazardous service,
  • Takes place under conditions simulating war, including training exercises such as maneuvers, or
  • Is caused by an instrumentality of war.

4.You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it. Your exclusion under this condition is equal to the amount you would be entitled to receive from the VA.