Are Veterans Disability Benefits Taxable?
If you are new to receiving Veterans Administration (VA) disability benefits, or if you are in the process of applying of them you might be curious about the tax liability that comes along with the monthly check. Military disability pay is awarded to disabled veterans for personal injury or sickness suffered during military duty that led to a disability. If you receive VA disability benefits, they are not taxable and are not included in the gross income you list on your income taxes.
However, if you receive military retirement disability pay, it could be taxable. Military retirement disability pay is not the same as VA disability income, where you apply for monthly disability benefits. If any of these apply, your military retirement disability income can be excluded from your taxable income:
⦁ You were eligible to receive disability pay before September 25, 1975.
⦁ You were serving as a member of a listed government service or with its reserve unit or you were under a binding written contract to join as of September 24, 1975.
Your disability payments are from a combat-related injury. This is a personal illness or injury that is:
⦁ Resulting from armed military conflict;
⦁ Happened while you were engaged in an extra-hazardous service;
⦁ Occurred under conditions simulating war, including training exercises or maneuvers; or
⦁ Is caused directly by an act of war.
Or, if you meet the requirements that entitle you to receive VA disability benefits if you were to apply for it. Your exclusion under this rule would be funds equal to the amount you would be entitled to receive if you received VA disability compensation.
Proceeding with a VA Disability Claim
If you suffered a military-related injury, you might be entitled to receive VA disability benefits. VA benefits are non-taxable, and they are awarded based on the disability rating you receive. If the VA approves your claim, they will assign a rating that ranges anywhere from 0% to 100%. Evan a rating of 0% is acknowledgement that you have suffered an illness or injury while on active duty that is connected to your military service, but it doesn’t warrant benefits at this time. It is good to get a 0% rating rather than get a no-service related ratings because if your condition worsens later on, you can ask to have that rating upgraded. To proceed with a disability claim, you need to enlist the help of a disability lawyer.
If you are among veterans with PTSD, the disability rating is listed under the General Rating Formula for Mental Disorders, which indicates the criteria for disability ratings with such impairments are 0%, 10%, 30%, 50%, 70%, or 100%. Veteran PTSD benefits are part of the VA disability benefits available to soldiers who suffered injuries while on active duty. Impairment ratings are how the symptoms of your service-related condition are equated into a percentage and monetary value. Many veterans with PTSD believe that they did not receive an accurate rating for their condition. A Social Security disability lawyer can help you with these claims and help you argue your case as well as your disability rating.
A disability attorney knows how to proceed with these claims and how to help you get maximum compensation for your condition. If your military service left you with an illness or injury, consult with a Social Security attorney who will fight for your rights. Often, an initial claim for disability is denied but with the right help, you can file an appeal and get approved. An experienced attorney understands the disability process and what evidence is needed to prove a case. Completing a thorough investigation and gathering the right documentation, your disability lawyer can help you prove your veteran disability eligibility and get the benefits that you need and deserve.
Social Security Disability Benefits
If you receive VA disability benefits, you might be applying for or receiving Social Security Disability Insurance (SSDI) benefits as well. Social Security benefits can be taxed, but it happens very rarely. The majority of those who are receiving Social Security disability benefits don’t receive enough income to pay taxes. Only about one-third of those receiving disability benefits pay taxes, so in general very little SSDI is taxable. Social Security garnishment can only be done by the U.S. government to retrieve money owed to it, for situations such as back taxes or for a defaulted student loan that the government had guaranteed. Disability income is exempt from garnishments by creditors.
If you believe you meet the Social Security qualifications or the requirements for VA benefits, you should file claims for benefits. The Social Security application and the VA disability application can be quite challenging to complete. A Social Security lawyer knows what information is needed and how to properly complete your application to improve your chances of being awarded disability benefits. Often, the SSDI application is denied or the VA disability claim is not approved, but with the help of an experienced disability lawyer you can appeal your Social Security denied claim or your denied VA disability application.
To receive Social Security disability, you have to have a condition that will render you disabled for a minimum of five years or result in your death. Your disability can be the result of multiple conditions, and other conditions can be included along with your military disability used for your VA benefits. SSDI only offers benefits for full, permanent disability and doesn’t give disability ratings. Your SSDI application could be denied twice, but if you don’t appeal those decisions you will have to start the application process all over from the beginning. After the second appeal, your claim will go before an administrative law judge who will rule on the outcome. A Social Security lawyer is needed at the hearing level so you can have legal representation that will help guide you through the process.
To learn more about disability benefits and the tax obligations that come with them, contact your New Orleans disability legal team at Ascend Disability Lawyers, LLC.
