CRSC estimate request

M

Ms4

PEB Forum Regular Member
Registered Member
First. Thanks. I’ve been trying to understand this math and these laws since I started my PEB and don’t have a full grasp of it yet.

VA ratings and PEB determination came back but I’m appealing to fix a combat code. Trying to understand the most likely amount for family budget(see kids).

o High 3 total base pay = $6739
o 20 years and 10 months of service
o 100% VA
o SMC-K confirmed ($136)
o married and 4 kids under 18 years.

PEB paperwork says I will be paid at 75% (70+20=80, max 75%)

2 conditions
Condition a) 20% combat related
Condition b) 70% non CR (appealing)


--I would qualify for regular retirement at 20 yrs 10mo

Assume the appeal is successful.

Thanks for any help!!
 
Your CRSC payment won’t be any higher than your regular retirement. It’s just going to be tax free.

By law you can’t receive anymore than your VA comp and your longevity pay. So even though you have a 75 percent DOD rating you cannot exceed the 20 years and 10 months of pay which is your longevity pay. That is basically 52.5 percent of your high three. It’s a little less but just barely.

Also when you retire you will automatically get concurrent receipt. Provided you qualify. If you are a reservist you might have to wait. Once you apply and are approved for CRSC you will have to elect to enroll into the program. In my case I swapped and they stopped my pension completely for about 7-8 months. I finally started getting paid again and they eventually paid me back the months they had stopped my pay.
 
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Well that’s unfortunate. Appreciate the help! Back to the job search!
 
Ms4 said:
Well that’s unfortunate. Appreciate the help! Back to the job search!
Click to expand...
If one condition is combat related then the entire chapter 61 pension is exempt. So there isn't a need to appeal to add the combat related designation on additional conditions. Once you are medically retired you can apply for CRSC. Since you have 20 years you can't gross any more since you will be owed your earned longevity pension + VA compensation.

However, if your CRSC% is high enough its possible that all of your compensation would be exempt from taxes meaning your net compensation would be higher. That's what my wife was able to do. She had combat related. She was 04 with 17AFS. She was 75% DOD. VA is already exempt. Her chapter 61 pension was greater than the VA offset so she got the difference leftover and it was exempt due to the combat related designation on one condition by the PEB. She applied for CRSC and was approved for 80%. She was losing $1,600 from the VA offset and since 80% CRSC using VA pay tables exceeded that amount she hit the cap for CRSC compensation. CRSC is tax exempt too. So all of her income became non taxable!
 
Provis thanks for the reply! Still confused. In your first paragraph you say if one condition is combat it’s all exempt. The second paragraph says if the percentage is high enough then it’s all except. I don’t understand the difference.

Right now I understand that I’ll retire and be taxed on my DoD retirement at 52.5%. And get my VA. If I apply for crsc (after appeal) I’ll get back the taxes on 80% of that taxed retirement. Am I wrong for assuming this?
 
Ms4 said:
Provis thanks for the reply! Still confused. In your first paragraph you say if one condition is combat it’s all exempt. The second paragraph says if the percentage is high enough then it’s all except. I don’t understand the difference.

Right now I understand that I’ll retire and be taxed on my DoD retirement at 52.5%. And get my VA. If I apply for crsc (after appeal) I’ll get back the taxes on 80% of that taxed retirement. Am I wrong for assuming this?
Click to expand...
When you earn 2 retirements you get to choose which one to use. Your retirement for chapter 61 is 75% DOD and all of it would be tax exempt since 75% is higher than your earned longevity pension of 52.5%. The rest of your pay is from the VA but it will be capped out since you can't get more than the combination of your earned longevity pension of 52.5% + VA compensation. Since one or more conditions are combat related you shouldn't have any taxes due on any of it. I was stating that if for some reason that wasn't the case you can apply for CRSC and CRSC is tax exempt and reduces your taxable income but you can only get one between concurrent receipt of VA pay + Pension or CRSC + Pension.

So basically wait until you get out. See if any of your pay is taxable. It should not be. If DFAS or anyone didn't screw up you could apply for CRSC to see if that would get you to 100% tax free. The total compensation part is not in play. You will max out compensation with having earned a regular retirement + VA compensation.

The chapter 61 pension helps because with at least 1 condition being found combat related by the PEB the entire pension is exempt from taxes. The only other requirement is that your DOD% must be higher than your longevity pension. You stated that you maxed out the DOD% at 75%. Like I have said many times only 1 condition needs to be combat related. My wife had 3 conditions all 50%. One was combat related. That made the entire 75% DOD medical retirement exempt from taxes. Also, 75% DOD medical retirement is important because it lowers your floor for compensation. If your VA% went down to zero you would still get that 75% of your HIGH 3 for the rest of your life! That is way more money guaranteed than your 52.5% for your regular retirement that you have earned.

So basically, you are set. There is nothing that you need to do. All of your income should be exempt form taxes and is the highest total compensation that you can achieve. Without the combat related designation the only way to get there is for CRSC which is not needed in your case.
 
Thanks for being patient and explaining this. It helps a lot!
 
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