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Is My Va Disability Compensation Taxable

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Standard Va Disability Claims

Scammers Are Targeting Veterans – AARP

With standard VA disability claims, the VA gathers evidence and compiles all supporting documents.

If the VA is unable to obtain a needed document, they may require your help. When help is required, it typically applies to documents not held by a federal agency, such as private medical records, employer information, and documents from state or local governments.

As with all claims programs, be prepared to provide your DD214 , service treatment records, VA medical records, and private medical records about your claim. Those needing help applying for their VA disability claim may also work with an accredited attorney, claims agent, or Veterans Service Officer .

Social Security Disability Income Requirements

It is possible for;either adults or;children with physical and/or mental disabilities to receive social security disability benefits. Disabled citizens are a protected class from discrimination in any way. Mortgage lending;included.;Sometimes disabled borrowers are victims of unintentional discrimination. Mortgage guidelines require a 3 year;likelihood of continuance for qualifying income.;Older mortgage guidelines required a 3 year proof of continuance to count social security disability income. Although, this was extremely difficult to prove in many cases. Furthermore, it is illegal.

Per the Consumer Financial Protection Bureau , the practice of requiring proof of disability continuance is discriminatory. The CFPB reminds lenders that disabled persons are a protected class under section B of the Equal Credit Opportunity Act ;and should be treated fairly. Even though there are limits for verification, income must be proven to count it.

Filing Your 2017 Taxes

If youre still filing taxes for 2017, youll still have the ability to claim those miscellaneous deductions, which will help cut down on the federal tax on military retirement you pay. Items like moving and job search expenses can make a big difference, especially since the standard deduction in 2017 was only $6,350 for individuals and $12,700 for couples.

References

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Which Disability Benefits Are Tax

In addition to receiving tax-free disability payments, the IRS also does not require disabled veterans to pay taxes on the benefits indicated below.

  • VA grants used to make a home more accessible for veterans who use a wheelchair.
  • VA grants used to design a specialty vehicle for veterans who lost their sight or the use of one or more of their limbs.
  • Benefits received under the VA dependent-care assistance program.

You do not have to file any type of tax paperwork with your federal return if you receive any of these tax-free disability benefits. The IRS knows that disability benefits are free to veterans and applies the tax break automatically.

Tips About Va Compensation And Social Security

va disability combined rating table calculator ...
  • SSDI and SSI are not intended to provide a full living wage; the Social Security official site itself advises that in 2019 alone, Social Security paid an average monthly disability benefit amount barely enough to keep a beneficiary above the 2018 poverty level and any additional assistance you can apply for is crucial.
  • If you have the ability to apply for VA benefits first, it can help to do so if you already have a 100% disability rating from the VA. Some vets cannot do this, but those who can should take advantage of the option to have their SSDI or SSI benefit application expedited as described above.
  • VA compensation and military retirement pay combined may render some applicants ineligible for SSI, but SSDI compensation may still be possible.
  • Your financial need will determine which Social Security program you qualify for when claiming disability benefits.
  • VA rules for disability pay require the veteran to establish or provide proof that establishes that the medical issue occurred on active duty or was aggravated by it.
  • SSDI and SSI are federal programs, but not limited to the military.
  • VA disability compensation is limited to the service member, but some VA benefits are payable for spouses, caregivers, and other family members. Be sure to ask about these.

Read Also: How To Get A New Disability Card

How To Determine Your Disability Compensation

To determine your disability compensation, you need to file a claim with VA. The VA rates your disability by severity after reviewing every piece of evidence in your claim.

You may only receive compensation for a single diagnostic code per condition, even if that condition satisfies more than one diagnostic code. However, those with more than one condition may receive additional compensation based on the combined rating system.

You may receive additional compensation if:

  • You have very severe disabilities or loss of limb
  • you have a spouse, children, or dependent parents
  • you have a seriously disabled spouse

Note: If you have more than one child or your spouse receives Aid and Attendance benefits , be sure to include the figures from the “Add” row.

Did you know: Veterans can use their disability income in conjunction with their VA loan benefits. Speak with a home loan specialist to see how much you can afford.

Are There Income Limitations For Va Loans

No, the VA does not limit income for qualifying VA loan borrowers. Other government-guaranteed mortgage programs can set a maximum income amount to qualify for specific loan programs but the VA has no such requirement.

Regardless if you make $500,000 per year or $50,000 per year, VA lenders underwrite your loan in the exact same manner as it addresses debt to income ratios and affordability.

VA loans do have a unique qualifying guideline that establishes what is called residual income that VA borrowers must have.

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Va Mortgage Question Regarding Grossing Up Income

Long time lurker here! We recently applied for a mortgage using my husbands VA loan benefit. Got a message from the loan officer today saying that all was well so far. My husband, who is 100% disabled, receives monthly VA disability and CRSC and I receive VA caregiver pay as his caregiver. All of this is non-taxable. Thanks to whoever posted the VA guidelines in this forum, I read the guidelines and it mentions grossing up non-taxable income for the debt to income ratio only. ;I asked the loan officer and she said that the lender does not gross up VA pay or CRSC pay, only Social Security payments. Does anyone know this to be true? My understanding was that as long as it is non-taxable, it could be grossed up. ;I got the feeling that she does not know what to do since she said she is sending our file to underwriting to see what the underwriter thinks. Please help. Thank you.;

you can gross up if it is non taxable income

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How Do I Get Tax Help For My Va Benefits

When Will I Get My VA Disability Back Pay?

With the plethora of benefits for veterans at both the federal and state levels, determining which benefits are taxable can be challenging. A qualified tax professional who specializes in military and veteran tax returns can be of great help if you need assistance.

If you want free help, you can use Military OneSource, a wide-ranging website with information about free military tax filing through MilTax and contact information for MilTax consultants. Also, veterans can get free help from the IRS Volunteer Income Tax Assistance program.

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Some Background On Va Benefits Compared To Social Security Disability

VA compensation for medical conditions, injuries, and other issues is conditional. The VA must determine that your medical issues are service-connected or service-aggravated and award a disability rating on that basis.

VA disability pay requires the veteran to submit medical documentation, evidence , civilian care records, etc. A VA medical claim is reviewed by the VA. Compensation is awarded on a scale of percentages and culminates in a maximum award of 100% disability.

Quick Breakdown Of VA Disability Benefits

  • Veterans go through a VA-directed medical review
  • Veterans are rated on a percentage scale for disabilities and conditions that affect the ability to live and work
  • Compensation is subject to review
  • No income caps or asset caps to receive the benefit

Is It Wiser To Buy Disability Coverage With Pre

There are many considerations to be made when deciding to pay your premiums with pre-tax or post-tax dollars. For example, what is the nature of your workplace? If you work in a hazardous environment where debilitating injuries are likely to happen, paying with post-tax dollars would be the wiser choice.

Accidents are always unpredictable and can be life-altering. If they do occur, you would be fortunate to receive your benefits tax-free for the duration of your short-term or long-term disability. To be prepared for the worst, it often can be beneficial to pay a little more now to receive a more substantial benefit if you experience an accident leaving you unable to work. Tax-free benefit payments could be closer to your regular take-home pay, helping you maintain financial stability while adjusting to living with your disability or illness.

If you choose to pay for your premium with pre-tax dollars and you become disabled, 100% of your disability benefits will be subject to federal income tax.

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Benefits Of Freddie Mac Fixed Income Mortgage Guidelines On Conventional Loans

Freddie Mac, Fannie Mae, and HUD are always looking for ways to improve the mortgage process.

  • As mortgage professionals, documentation is part of our day to day lives
  • We do not ask for documentation just for fun
  • There are very specific guidelines on what we must document from a borrower
  • The mortgage process has a very strict documentation policy

So anytime we see a major player such as Freddie Mac remove documentation, we smile!

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What Qualifies A Veteran For Benefits

Can I Receive My Spouse

While many Veterans may deal with health problems, it takes more than just a physical or psychological issue to qualify for VA disability benefits your disability needs to be service-connected. A service-connected condition is directly linked to a Veterans time in the military. This means that the disability was either caused or worsened by an injury or experience from a Veterans time in service. When a Veteran applies to receive disability benefits, the VA requires them to go through the process of getting their condition evaluated examinations, reviewing medical records, and more can all contribute to whether the VA approves or denies a Veterans claim.

Veterans can get service-connected for a wide range of conditions. In most cases, all the VA needs to establish a service connection is a current medical diagnosis, an in service event or injury, and a verifiable link between a Veterans disability and their in service event or injury. The VA refers to this link as a nexus. Without a verifiable nexus, a Veterans claim is typically either deferred or denied by the VA.;

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Are Social Security Disability Benefits And Va Benefits Taxable

by Gardberg & Kemmerly, P.C. Attorneys at Law | Apr 14, 2016 | In The Community, Social Security Disability, Veterans Disability Benefits |

Are Social Security Disability Benefits and VA Benefits Taxable?

As for VA benefits, military retirement pay based on age or length of service is considered taxable income for federal income taxes. However, military disability retirement pay and Veterans benefits, including service-connected disability pension payments, may be partially or fully excluded from taxable income. VA benefits that are not taxed include: education, training, and subsistence allowances, disability compensation and pension payments for disabilities paid either to veterans or their families, grants for homes designed for wheelchair living, grants for motor vehicles for veterans who lost their sight or the use of their limbs, veterans insurance proceeds and dividends paid either to veterans or their beneficiaries, interest on insurance dividends left on deposit with the VA, benefits under a dependent-care assistance program, and payments under the VAs compensated work therapy program.

Taxability Of Military Retirement Pay

Military retirement pay based on age or length of service is taxable and must be included as income for Federal income taxes. The amount of your pay that is deducted for the;Survivors Benefit Plan is excluded from taxable income. For Social Security tax purposes, military retirement pay is not considered earned income and no Social Security is withheld.

Military Disability Retirement Pay shouldn’t be included in taxable income if your disability or injury was caused by combat or if you get military disability instead of VA;disability for your injuries.

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Types Of Veteran Benefits You Can Receive

There are two main types of VA benefits: cash and discounts.;

Cash benefits are monthly payments from the government for retirement and disabilities you incurred from your military service. If youve been permanently and totally disabled, you can also qualify for Social Security disability benefits.;

Veterans are also privy to discounts on mortgages, income tax preparation, groceries from the commissary, financial coaching, and educational benefits with the GI Bill.

Free Va Claim Consultation

VA Disability and Property Tax Exemptions – Common Misconception For a Disabled Veteran In 2021 ðºð¸

Are you overwhelmed with the VA claims process? Want to know if you have a case? Give our veterans disability benefits lawyers a call. We can talk about your 70 percent VA disability rating and examine what you should do next. Remember, theres a chance we look at your rating and tell you to accept what you have. Well be brutally honest with you about your claim. There is never a cost for a consultation.

Recommended Reading: What Is The Medical Model Of Disability

You Can Appeal A Va Approval Too

Even if the VA approves your disability claim, you still may not be getting the benefits you deserve. The VA gives benefits based on a rating scale, and each rating corresponds to a higher level of monthly compensation. If you have been given a disability rating that you feel is lower than what you deserve, you can appeal the VAs decision and potentially get a higher rating.

Getting the disability rating that your condition warrants can be life-changing. If you have a severe service-connected disability that has left you unable to work, you may be able to qualify for the highest possible disability rating 100%. If you have been granted a lower than a 100% rating after filing your claim, an appeal with the help of a skilled attorney can make a major difference in your ability to stay financially stable.

If you need assistance appealing your VA claim, contact the attorneys at Berry Law for a free case evaluation.

Free Tax Preparation Services

Each year, millions of people have their taxes prepared for free by IRS-certified volunteers. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs have helped people for more than 40 years. Over;1.3million;free tax returns were prepared for Veterans since the inception of the MOU at nearly 8,000 free tax preparation sites across the country. Here are some details about VITA and TCE:

  • The IRS works with local community groups to train and certify VITA and TCE volunteers.
  • VITA generally offers free tax return preparation to those who qualify.
  • TCE is mainly for people age 60 or older. The program focuses on tax issues unique to seniors. AARP participates in the TCE program through AARP Tax-Aide.
  • VITA and TCE provide free electronic filing. E-filing is the safest, most accurate way to file your tax return. If you combine e-file with direct deposit, you can get your refund faster.
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    Indemnity Or Offset For Va Waiver

    May a state court order a retiree who waives retirement to receive disability to indemnify the former spouse for the reduction in that spouses share of the retirement?

    No, according to a unanimous 2017 U.S. Supreme Court decision, Howell v. Howell,;137 S.Ct. 1400 . SCOTUS made clear that states not only cannot divide disability directly , but cannot do it indirectly either by ordering dollar-for-dollar indemnity.

    Prior to Howell, federal law had long prevented states from dividing VA disability payments.;Mansell v. Mansell, 490 U.S. 581 . Colorado has similarly ruled that divorce courts cannot divide VA disability payments, nor require the servicemember to indemnity the spouse for a VA waiver of retired pay that happened prior to dissolution.;In re Marriage of Franz, 831 P.2d 917 .

    The majority rule among the states had been that the federal prohibition on dividing VA disability did not preclude a state from ordering the retiree to indemnify the former spouse for the resulting VA waiver, under the theory that once the former spouse has a vested interest in the retirement, the military member cannot unilaterally reduce the other spouses share by applying for VA disability. In other words, once the spouses were divorced, if the member then converts a portion of retirement to disability, he/she would owe the former spouse indemnity for any VA waiver.

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    And We Will Be There For Years To Come

    Social Security Turned Down My Disability Application ...

    Social Security has two trust funds Old-Age and Survivors Insurance and Disability Insurance . The OASI and DI Trust Funds have reached the brink of depletion of asset reserves in the past. However, in 1977 and 1983, Congress made substantial changes to the program that resulted in the $2.897 trillion asset reserves that exists today.

    The two Social Security trust funds will be able to pay all benefits in full and on time until 2035. Even if legislative changes are not made before 2035, well still be able to pay 79 percent of each benefit due. Social Security has always changed to meet the needs of the people we serve and will continue to help support you and your family. Whether you are about to retire, become a full time grandparent, or start a new chapter, Social Security can help you secure today and tomorrow. Social Security salutes all Veterans for their service and sacrifice.

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