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Retirement Pay & Va Comp--adjustment Of Taxable Income & Tax Withheld


Ron II

Question

When is the adjustment for the retroactively approved non-taxable VA compensation made on the DFAS

retirement account? I have a new retirement account at DFAS, effective September 1; but, there are no adjustments for January-August 2007 where my taxable income should have been reduced and replaced by a like-amount of VA compensation. My award was retroactive to August 2006.

CRDP is not a consideration at this time.

Thanks!

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M - there will be no adjustment on the retirement les or mypay. This is something you will have to take up with the IRS by filing an ammended tax for the years concerned. In most cases you will be able to go back three years. Check out the IRS web site.

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I understand about the prior years; but, what about the current year? The retiree pay statement summary shows year-to-date taxable income and tax withheld for 2007. There is no adjustment for the first eight months. In other words, even though I should have an eight-month offset, but the year-to-date summary of taxable income shows the result of: 8 x amt of retired pay--no reduction for offset.

Thank you for your comment-I probably did not make myself clear.

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There is a Bill pending in the Congress that might help you out f the adjustment caused a big tax problem for you.

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I had the same situation last year. DFAS won't go back and adjust the amounts. Just call the IRS and they will explain what you need to do. When I talked to the IRS, the person was very familar with the situation and explained how to put in on the tax form. I don't have a copy of it in front of me, but on the line for pensions there is a column a and b. They had me put the 1099r amount on the total column and the adjusted amount (you have to calculate) on the taxable column.

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Be sure to include a copy of your award letter and include a short note explaining why you adjusted the amount shown on the 1099R. In most cases that will fix it up.

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