Va Disability Waiver Refund

[parforever]

I don't like to spread rumors but wanted to see if anybody had heard about this? I got this in an email from another retiree and many of us in the office are pretty sure there is no validity on this, but anybody hear of this? (See email transcript below)

Waiver (Refund)

Subject: VA Disability Waiver Refund$$$$$$$$$$$$$$$$

If you have a VA Disability rating of 90% or less, did you know that

you are eligible for a VA Disability Waiver Refund$$$$$$. It can be

filed for the last (3) years and every year from now on until 2014.

This includes Federal and State refunds, but filed separately. I got

my package back a few weeks ago and after reviewing it with my tax guy

(also a disabled veteran), we filed for it.

I talked to local veterans in the know and nobody has even heard of

this refund program? Anyway, if you want more information on this

refund program, the person to get the information from is Mr. XXXXX

(USAF Ret.) in Ft Walton Beach, FL. He's been helping disabled

veterans get this refund for over 10 years.

If you decide to file for this refund, you can call Mr XXXXXX at

(xxx)xxx-xxxx cell and he'll gladly explain the program and what documents

you must provide to him.

He does all the paperwork and prepares all the tax forms. All you have

to do is sign the 1040X amendments and mail them in to the IRS. He

even provides the addressed mailing envelope.

There is a fee for his services.

He will need your 1040X for the year you file

DD214

1099R

Disability Rating Letter

Retirement Statement for each month for the year you are filing.

He charges 10% on the honor system.

The number I gave you is good for him because a talked to him a couple of weeks ago and got my paper work back within a week.

He does everything once you get it back all you have to do is sign it. He even includes addressed envelope and sign receipt to the IRS.

I know several people who went back to 2006 but last year was my first full year of retirement. You can call the VA and get a copy of your disability letter and call RAS to get a copy of old pay statements. I would give him a call prior to mailing it to him to ensure you have everything.

If you have questions hit me up.

[john999]

Are they talking about a tax waiver refund? I would want to know exactly what is being refunded? I remember some people I worked with at the Post Office who swore that the constitution declared that they did not have to pay income tax. I used to hand out the checks sometimes and I noticed everyone of them had a levy on their income from the IRS. They did not have to pay, because Uncle just took it right out of their paychecks anyway. Yes, if it sounds too good to be true it probably isn't.

[broncovet]

I would not be too fast to discredit this...I would not put it past the VA (or IRS or other government agency) to not tell Veterans about some of the benefits. In fact, the VA often buries details of benefits deep in their website so you cant really find them, or figure out how to apply.

[jbasser]

I believe it is Insurance waiver.

http://www.warms.vba.va.gov/admin29/m29_1/part1/ch06.doc

J

[mags1023]

It sounds to me like a way to recoup income tax that was charged based on your retired military pay. Since 2004, CRDP & CSRS (not familiar with CSRS since I don't get it) you receive concurrent pay if you are 50% or higher. If you are awarded retro for a claim going back 3 years or so, not only do you get retro, but your income was taxed at a higher rate because you weren't getting a VA waiver. This also applies to SC at 40% and below, because a portion of your retired pay is exempt from tax since you received an award. This is fairly complicated, but can make a significant difference. I don't think you can go back any further than 3 years as far as filing a 1040x. An example would be:

In 2006 you had a 0 percenrt rating and your retired pay was $2500 a month. In December of 2009, you are awarded 80% va disability dated back to January of 2006 (Effective date). Your VA waiver for 2009 would be $180 a month. Multiply that by 12 and it = 2160. So your adjusted gross income for 2009 would be $2160 less than what you filed in 2009. If you do this for each of those 3 years you can see that it is thousands of dollars. Also the 10 year phase in started in 2004,so the VA waiver was much higher. It may be over $400 a month ($4800 a year). The VA waiver is that portion of your taxes that is tax exempt. You will receive a retro payment from the VA for VA compensation, but they don't do anything with your retired pay except take out the difference you received from DFAS so you are not overpaid. If you don't change your tax return, you actually get a double whammy, because VA takes away what DFAS paid you, but the IRS doesn't know anything about it unless you file an ammended return.

Hope this helps out and doesn't confuse anyone.

[broncovet]

I think mags is right. Unless you are retired military, it would not apply. My guess is that it would apply if you were getting retirment, then got a VA disability. Since VA disability is non taxable, you would be entitled to a refund of the taxes you paid on your retirement pay.

My advice would be to ask your tax preparer to look into this for you, explaining that your VA is non taxable, while military retirement is taxable, and that your retirement deducted your taxes, and later the VA said that it was disability pay, not retirement pay.

[12R3G]

CRDP (concurrent receipt) is automatic--if you are 50% or more and receiving retired pay, then DFAS and DVA will coordinate and your retired pay offset will decrease according to a formula set in law until it is fully implmented in 2014. The offset is shown on your RAS as a "VA Waiver". If you are 100%, the offset was eliminated immediately. Tax code allows for filing amended tax returns for up to 3 years.

CRSC (combat-related special compensation) is administered by your service department...not DFAS and not DVA. CRSC must be applied for and allows an offset for combat-related disabilities (direct and secondary). You can receive both CSRC and CDRP, but not for the same disabilities (no double-dipping). CRSC is retroactive to 2004. CSRC, btw, does not mean as a direct result of combat; it also includes injuries received in combat training and exercises, and hazardous duty (aviation for example). Just like getting SC, you need a nexus letter from a MILITARY or VA (no private providers) health provider stating that your disability stems from combat, combat-training/simulated combat accident/harzardous service, etc., using the exact same verbiage the VA likes to see.