Tax season is upon us again – a stressful and confusing time for everyone, but especially for those who suffer from disabilities and their families. Veterans who were seriously injured or made ill through their service likely receive disability pension payments, Social Security disability, or a number of other benefits related to their condition and their service in the armed forces. Which of these payments count as taxable income, and which are not taxable?
While military retirement pay is taxable and must be reported on your tax returns, most benefits related to veterans’ disability are not taxable under federal law. Specifically, any veterans receiving disability pension payments do not have to pay taxes on their benefits or report their benefits as income.
Disabled veterans also do not have to pay federal taxes on a number of related benefits including:
- Grants to modify their home for disabled access
- Grants for disability-friendly motor vehicles
- Compensated work therapy program payments
- Dependant care assistance program payments
- Veterans’ insurance proceeds
- Education and training allowances
It is important to note that although disability payments from the Department of Veterans’ Affairs are not taxable, disability benefits you receive from the Social Security Administration may be taxable depending on your income and your spouse’s income. While part of your Social Security Disability Income (SSDI) may be taxable, your Supplemental Security Income (SSI) benefits are usually not taxable.
If you are unsure of whether or not your veterans’ disability benefits, allowances, or other payments are taxable, you should speak with a tax advisor or accountant – a number of services in Texas assist disabled veterans with tax forms, questions, and paperwork. Generally, though, while military retirement payments are taxable, veterans’ disability payments are not.
If you have a service-related injury or health condition and believe you should be receiving veterans’ disability benefits, contact a Houston veterans’ disability lawyer at Morgan & Weisbrod to set up a free, confidential consultation. It is never too late to receive disability benefits and back pay, and we have what it takes to guide you through the process of securing the payments you need and deserve. Call us today at 800-800-6353.
by Paul B. Burkhalter Managing Partner of Morgan & Weisbrod, Board Certified in Social Security Disability Law.