According to the Internal Revenue Service (IRS), disability benefits received from the Department of Veterans Affairs (VA) should not be included with your gross income on your federal tax returns. These benefits are specifically excluded by federal law. Additionally, Texas does not currently have a state income tax so your disability benefits will not be subject to state income tax if you reside in Texas.
Other Veterans’ Disability Benefits Are Also Excluded From Your General Income
Your monthly veterans’ disability benefits are not the only veterans’ disability benefits that are excluded from your general income for tax purposes. Other federal veterans’ benefits that are not taxable include:
- Grants to make your home wheelchair accessible
- Grants for vehicles that need to be modified because of your disability
- The proceeds of a veterans’ endowment policy
- Veterans’ dependent care assistance program benefits
- Survivor’s death gratuity payments
- Work therapy program payments made or compensated by the Department of Veterans Affairs
- Sustenance allowances
- Education and training compensation
Any other disability benefits you receive through programs that are not run by the Department of Veterans Affairs may be subject to different tax rules.
Pay What You Owe
As a veteran of the United States armed services, you deserve to get all of the benefits to which you are legally entitled. This includes the full amount of disability benefits for which you qualify. You should not subject yourself to paying more in taxes than you legally owe unless you wish to do so voluntarily.
If you have any questions about state or federal tax liability for your veterans’ disability benefits, it is important to speak to your accountant directly. Similarly, if you have any questions about your eligibility for veterans’ disability benefits, you should speak to an experienced Texas disability lawyer at Morgan & Weisbrod. Please contact us via this website or by phone to schedule a meeting and to make sure you get the fair benefits you deserve.
by Paul B. Burkhalter Managing Partner of Morgan & Weisbrod, Board Certified in Social Security Disability Law.