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I'm Looking For A Link On The Tax Free Status Of Va Comp?


Philip Rogers
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  • HadIt.com Elder

I'm dealing w/a bank and they are requesting proof that I need not file Federal income tax for 2009. My gross & net income for 2009 was $43,860. The $32,076 was from VA Comp and $11,784 from SSDI. I'm looking for an official link that states that VA comp is not taxable. Thanks!!!

pr

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  • HadIt.com Elder

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United STates Code, TITLE 26—INTERNAL REVENUE CODE

2009 Publication 525

Taxable and Nontaxable Income

http://www.irs.gov/publications/p525/index.html

VA disability compensation is awarded tax-free to a veteran injured in combat, or in the line of duty. This compensation is federally protected from attachment of any kind under 38 USC §5301.

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  • HadIt.com Elder

Thanks, Pete, Don and Adora!!! That should take care of that aspect, now. Double thanks!!! I needed a letter from my Trust atty and that cost me $211 extra. Trying to save where I can.

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  • HadIt.com Elder

Basically US Title 38 and IRS documents state that VA compensation is NOT income, and is NOT TAXED. However, local divorce courts tend to include the compensation amount as income. There is proposed federal legislation to specifically change this practice.

This is the best I could due for authoritative web references. One problem I encountered is that the feds have changed many web sites or had some down.

TITLE 38--VETERANS' BENEFITS

PART IV--GENERAL ADMINISTRATIVE PROVISIONS

CHAPTER 53--SPECIAL PROVISIONS RELATING TO BENEFITS

Sec. 5301. Nonassignability and exempt status of benefits

The first reference is to IRS related code

http://www.gpo.gov/fdsys/pkg/USCODE-2009-title26/pdf/USCODE-2009-title26-subtitleA-chap1-subchapB-partIII-sec140.pdf

http://www.gpo.gov/fdsys/pkg/USCODE-2008-title38/pdf/USCODE-2008-title38-partIV-chap53-sec5301.pdf

http://www.gpo.gov/fdsys/search/search.action?na=&se=&sm=&flr=&ercode=&dateBrowse=&collection=&historical=false&st=38+USC+5301&=title+38+part+IV&psh=&sbh=&tfh=&originalSearch=&sb=re&ps=10&sb=re&ps=10

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IRS Publication 17 http://www.irs.gov/pub/irs-pdf/p17.pdf Page 52, right column has your answer.

I'm dealing w/a bank and they are requesting proof that I need not file Federal income tax for 2009. My gross & net income for 2009 was $43,860. The $32,076 was from VA Comp and $11,784 from SSDI. I'm looking for an official link that states that VA comp is not taxable. Thanks!!!

pr

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