Veteran’s Owed Refunds for a Double Taxation Mistake

 

If you are a Veteran who received disability severance payments after Jan 17, 1991, and you counted that payment as income for tax purposes you may be entitled to a refund. 

 

The payments were pre-taxed so if it was listed as income on your tax’s you would have been double taxed on your payments. 

 

How much Money Should I be Refunded?

 

Write “Disability Severance Payment” on line 15 of Form 1040X and enter on lines 15 and 22 the standard refund amount listed below that applies:

 

  • $1,750 for tax years 1991 – 2005
  • $2,400 for tax years 2006 – 2010
  • $3,200 for tax years 2011 – 2016

 

*more instructions listed below 

 

How to Claim my Tax Refund

 

To claim your tax refund regarding your double taxation you must fill out the following form: 

 

Form 1040X:

https://www.irs.gov/pub/irs-pdf/f1040x.pdf

 

Is There a Deadline? 

 

There is a deadline for claiming your tax refund it’s within one year after you received your letter from the DoD. 

 

Instructions:

 

All Veterans claiming refunds for overpayments attributable to their lump-sum disability severance payments should write either “Veteran Disability Severance” or “St. Clair Claim” across the top of the front page of Form 1040X that they file. Because all amended returns are filed on paper, Veterans should mail their completed Form 1040X, with a copy of the DoD letter, to:

 

Internal Revenue Service

333 W. Pershing Street, Stop 6503, P5

Kansas City, MO 64108

 

Veterans eligible for a refund who did not receive a letter from DoD may still file Form 1040X to claim a refund but must include both of the following to verify the disability severance payment:

 

  • A copy of documentation showing the exact amount of and reason for the disability severance payment, such as a letter from the Defense Finance and Accounting Services (DFAS) explaining the severance payment at the time of the payment or a Form DD-214, and

 

  • A copy of either the VA determination letter confirming the Veteran’s disability or a determination that the Veteran’s injury or sickness was either incurred as a direct result of armed conflict, while in extra-hazardous service or in simulated war exercises or was caused by an instrumentality of war.

 

Veterans who did not receive the DoD letter and who do not have the required documentation showing the exact amount of and reason for their disability severance payment will need to obtain the necessary proof by contacting the Defense Finance and Accounting Services (DFAS).

 

For More Information:

 

https://www.irs.gov/individuals/military/combat-injured-veterans-tax-fairness-act-claim-information-available