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Understanding Crdp, Ab8, & Taxing


D Laurent

Question

Hello, all! Let me begin by stating how grateful I am for this site and all of you that contribute to it. I've been a "lurker" for many months, but have never posted because I always found an answer to my question by using the Search option. And it wasn't until yesterday that my claim closed and my rating viewable on my AB8. Hopefully now that I am near the end I will be able to contribute more of my experience to this forum in the future.

My question is similar to what OKIexpat asked a week ago. So if I could borrow your time for a bit to try for some clarification.

I am retired Air Force and left as part of the big force reduction. I completed 16 years and took the TERA option (the best option for my situation - already been through one MEB and won return to duty, now was facing another one). I do understand that TERA and 50% + qualifies you for CRDP, and I am thankful for the detailed info that Berta posted on OKlexpat's topic. But I just want to clarify I understand it completely.

My AB8 states:

The current benefit paid is as follows:

Gross Benefit Amount $1,995.48

Net Amount Paid $570.48

Effective Date December 1, 2014

Combined Evaluation 90 Percent

My retirement effective date is 1 Aug 14. I have read in multiple places that if you are eligible for CRDP that DFAS will automatically apply this to you upon completion of their audit. My concern is that if I am already eligible, why would the AB8 state something different? Do I really not have anything to worry about here (give it some time, I know)? Will my Effective Date adjust as well (retired 1 Aug 14), or is that something completely different?

And speaking of the DFAS audit, how do I know when, how long, or if that is happening at all?

Also: For CRDP, DFAS states "(CDRP) is taxed in the same manner as your retired pay, and it is normally considered taxable income." Does this mean that the total of what I will receive will be taxed, or just the amount of my retirement? I guess I was thinking that disability pay would be tax exempt, but I presume the CRDP puts it in DFAS's realm, which would constitute a standard income.

Anyway, thanks again for all that you guys and gals do. It has been so helpful. For me, adjusting to life outside of AD military has been more of an emotional hurdle than I was expecting. I hope to contribute my own experiences in the near future. And I guess I need to try for the 100% Club once I get my letter to know the details of my rating!

Edited by D Laurent (see edit history)
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