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CRSC question and amended tax returns

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AirborneA152

Question

I retired from the Army active duty in 2013 with 25 years and various combat deployments. I found out that I was 90 percent CRSC and 90 percent from the VA for disability. I got my CRSC letter from HRC and got my letter from DFAS about CRSC in 2018. I am wondering since I have been getting CRDP from the VA can I amend 4 years of my last tax returns if I could have gotten CRSC instead of the CRDP I got from the VA since CRSC would have reduced my taxable income? 
Thanks for any help!

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Its a great question, and I noticed others (besides myself) also did not have an answer.  Since I dont have an answer (out of my area of expertise), I will instead, guess.

First, try sending an IRIS email, with your question.  It would at least generate some type of answer.  

Apparently, you indicated amending your returns will make a difference, but that is unclear to me, since VA income is not taxable and does not show up on our 1040.  (My tax accountant told me not to put VA income down, it confuses IRS).  

But, if you deserve more compensation, at least with VA, you can request an audit of your compensation and they would at least owe you an accounting.  

I did (request an audit), and my comp was short..and short by a lot, so I got an additional 5 figure retro check.  I sent the audit to the finance office at my VARO, per Berta's suggestions.  YOu would want to submit the amended returns with it.  

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Since you are Retired Military, have you considered contacting DFAS?

Defense Finance and Accounting Service > RetiredMilitary > disability > payment (dfas.mil)

A retiree may be due funds from DFAS, the VA or from both agencies. DFAS and the VA remain in communication with each other to successfully establish and process CRDP and CRSC accounts.

DFAS will audit your account to determine whether or not you are due retroactive payment. An audit of your account requires researching pay information from both DFAS and VA. 

If DFAS finds that you are also due a retroactive payment from the VA, we will forward an audit to the VA. They are responsible for paying any money they may owe you.

Find out more about the VA Waiver, CRDP and CRSC on the webpage: "Understanding the VA Waiver and Retired Pay/CRDP/CRSC Adjustments."

For more information from DFAS, call toll free at 800-321-1080. Customer service representatives are available Monday through Friday from 8 a.m. to 5:00 p.m. (ET).

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Why do you think that CRSC will reduce your taxes?  CRSC and CRDP are both not taxable.  I was getting CRSC for 90% but when I reached 100% I switched to CRDP because the two disabilities that got me to 100% were not combat related.  

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https://militarypay.defense.gov/Portals/3/Documents/CRSC_Guidance_104.pdf

My God, what a read. 

Good luck trying to figure out where you fit in this puzzle.

The very last paragraph is the best read ever.

Hamslice

I'm pretty sure that you don't pay Federal income tax on CRSC, but read for yourself.

 

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