First, thank you for the accept.
I apologize that I termed this VA disability.....I did see that it was workman's comp...and workman's comp is what the IRS code is about. Here's the exact wording from the code:
Except in the case of amounts attributable to (and not in excess of) deductions
allowed under section 213 (relating to medical
, etc., expenses) for any prior taxable year, gross income does not
include - (1) amounts received under workmen's compensation acts as compensation for personal
injuries or sickness;
Since the workman's comp is not taxable income, and shouldn't appear on your 1040, you shouldn't be able to subtract it.
However, if you receive a reporting document for the comp, and that reporting doc forces you to put that amount into income (ex: comp being reported on a W2 or a 1099). then yes..........you may then subtract the amount on line 21. In effect, all you are doing is making the comp non taxable by subtracting it.
Here is the address to the code you mentioned...you will have to copy and paste it into your web browser:
I hope this helps.