I was told that the number of years used to calculate severance pay have been raised to a maximum of 19, rather than 12. In addition, I read on this site that when the VA substantiates my disability, I will get the withheld taxes back, but the article included below, says only for combat related injuries. Your help is greatly appreciated.
Tim
<FONT color=#000080>Unlike, the VA monthly stipend, severance pay from the Army may be taxable income for the soldier. Severance pay is not taxable for those soldiers who were in the Armed Forces on 24 September 1975 or if the disability is due to a combat-related injury or from an instrumentality of war (such as a parachute related injury). If the VA rates the soldier for the same condition which the PEB found unfitting and awarded a disability rating, the severance will then become nontaxable income to the separated soldier. If the calendar year during which the soldier was separated has not passed, the soldier can write to the Army Finance Center in Indianapolis requesting that the withheld taxes be rebated. Once the calendar year has passed, the Army has already transferred the severance pay tax withholdings to the Internal Revenue Service. A soldier must then request a refund with the IRS by filing a 1040X form along with his/her tax return. The soldier must also attach a copy of her DD 214, DA Form 199, and a letter from the VA documenting the soldier’s disability percentage. The IRS will review and consider the soldier’s filed tax return on a case by case basis.
Tim
<FONT color=#000080>Unlike, the VA monthly stipend, severance pay from the Army may be taxable income for the soldier. Severance pay is not taxable for those soldiers who were in the Armed Forces on 24 September 1975 or if the disability is due to a combat-related injury or from an instrumentality of war (such as a parachute related injury). If the VA rates the soldier for the same condition which the PEB found unfitting and awarded a disability rating, the severance will then become nontaxable income to the separated soldier. If the calendar year during which the soldier was separated has not passed, the soldier can write to the Army Finance Center in Indianapolis requesting that the withheld taxes be rebated. Once the calendar year has passed, the Army has already transferred the severance pay tax withholdings to the Internal Revenue Service. A soldier must then request a refund with the IRS by filing a 1040X form along with his/her tax return. The soldier must also attach a copy of her DD 214, DA Form 199, and a letter from the VA documenting the soldier’s disability percentage. The IRS will review and consider the soldier’s filed tax return on a case by case basis.
