Medical retirement

Tommycc14

Registered Member
I will be getting out of the army on the 28th of this month with 50% Army and 80% VA. I have a question that I keep getting mixed answers too. Do I get the money from the VA and Army retirement or just VA?
 

Jsmorales

Registered Member
You can choose the 50% from the Army and the other 30% from the VA but the smartest thing to do is just go with the 80% from VA because it will be Tax free. You will only receive both if it was a combat related injury.
 

Tommycc14

Registered Member
Ya my referring condition was PTSD from combat. My MSC made sure it said combat related in my claim. So I will receive both 50% from the army and 80% from the VA since it was combat related then? ?
 

chaplaincharlie

Staff Member
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You can receive more than just one if your are over 20 YOS or if combat or combat related injuries occurred.
 

Tommycc14

Registered Member
I got with my AW2 and got my CRSC paywork squared away and was tracking that. I was just getting mixed answers on if I got both va and army.
 

RonG

Staff Member
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Registered Member
You can choose the 50% from the Army and the other 30% from the VA but the smartest thing to do is just go with the 80% from VA because it will be Tax free. You will only receive both if it was a combat related injury.
The "option" is whether one elects to waive retired pay in order to receive VA compensation. VA comp cannot be paid to a retiree unless he/she agrees to waive retired pay dollar for dollar in the amount of VA compensation received. I can think of no situation where it would be wise to decline VA compensation. See next paragraph.

Occasionally, the VA compensation is less than the disability retired pay; this results in the following:
--Retired pay is reduced by VA offset and leaves residual retired pay (left over from the waiver).
--The disability retiree would receive VA comp + residual retired pay each month.

Regarding, "You will only receive both if it was a combat related injury." Combat Related Special Compensation (CRSC) replaces some or all of the waived retired pay for combat related disabilities. It is nontaxable. The amount of CRSC cannot exceed the dollar amount of the longevity portion of retired pay. In other words, the amount of waived retired pay in excess of the longevity portion of retired pay will not be replaced by CRSC.

50% Army and 80% VA

1. The VA compensation would not be received unless the retiree agreed to waive retired pay. Those two percentages would likely result in all the retired pay being waived and the retiree would receive only VA compensation. If the retired pay was more than the VA compensation, the disability retiree would receive VA comp + residual retired pay each month.

2. RE: "You can choose the 50% from the Army and the other 30% from the VA..." If he/she wanted to receive VA comp, he would receive the entire 80% amount, not 30%. The retired pay would be reduced as discussed in this post.

3. The CRSC for disability retirees is reduced by the amount of residual retired pay, if any.

Ron
 

Orange Sky

PEB Forum Veteran
Registered Member
Ron, or anyone in my situation,
So I receive military Chapter 61 disability pay in addition to my VA pay (CRDP, over 20 AD years). I receive 75% of my base pay. Is this taxed? Looking at my LES, in one column it shows “Taxable income” of $xxxx. I’m showing several dependents for tax exemptions claimed but no FITW is withheld, although some of it is in the “taxable income” remark.

It’s been that way since CRDP took effect. So is both VA and Chapter 61 disability pay not taxed?

Not to hijack this post but it could be helpful to the OP as well.
 

RonG

Staff Member
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Registered Member
Ron, or anyone in my situation,
So I receive military Chapter 61 disability pay in addition to my VA pay (CRDP, over 20 AD years). I receive 75% of my base pay. Is this taxed? Looking at my LES, in one column it shows “Taxable income” of $xxxx. I’m showing several dependents for tax exemptions claimed but no FITW is withheld, although some of it is in the “taxable income” remark.
It’s been that way since CRDP took effect. So is both VA and Chapter 61 disability pay not taxed?
Not to hijack this post but it could be helpful to the OP as well.
1. VA compensation is never taxed.

2. TDRL/PDRL Exemption: If you retired under a disability law (Temporary Disability Retirement List or Permanent Disability Retirement List), your retired pay will be fully non-taxable if your pay is calculated based upon your military (not VA) disability percentage and you meet one of the following conditions:
  • You were in the military or under a contractual obligation to join the military on September 24, 1975, or
  • Your military disability rating is combat-related
The welcome letter you received from DFAS when you first retired indicates whether your pay is computed using your military percentage of disability or your years of service.


3. Concurrent Retirement Disability Payments (CRDP): CRDP is a restoration of your retired pay, not a separate entitlement. Therefore, if your retired pay is taxable so is any CRDP payments you receive. If your retired pay is non-taxable, your CRDP is also non-taxable.

Items 2-3 are quoted from DFAS. SEE https://www.dfas.mil/retiredmilitary/manage/taxes/isittaxable.html <——Link

Ron
 

Orange Sky

PEB Forum Veteran
Registered Member
Thanks, Ron. That’s where I am confused still because I meet neither of those two items identified. I joined in early 90s and I do not receive CRSC.

My welcome letter gave me Option A (military disability percentage) since it was higher than years of service. And I agreed!

I just know I was being taxed at first (very little) and then I get the CRDP statement on a future RAS that states “Since you receive VA disability compensation pay......your CRDP rate is....”. Now I’m not having taxes taken out although my RAS reflects the exemptions.
 

RonG

Staff Member
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The info I provided from DFAS is not CRSC. Please note CRSC was not mentioned.

CRDP is a restoration of retired pay that has been offset (waived) by receipt of VA compensation.

Military retirement pay based on age or length of service is considered taxable income for Federal income taxes. However, military disability retirement pay may be partially or fully excluded from taxable income under the conditions I mentioned in my first reply. Apparently, you meet neither of those 'requirements."

You mentioned, "I’m showing several dependents for tax exemptions claimed but no FITW is withheld." More tax exemptions results in less tax collected; fewer tax exemptions results in more tax collected. Perhaps, your "several dependents" claimed results in zero tax collected. You can review the IRS web site to confirm the accuracy of how much should be collected each month.

You also said, "Now I’m not having taxes taken out although my RAS reflects the exemptions." Exemptions = reduced tax collection. See preceding paragraph.

If you want more tax collected, reduce your exemptions or even claim "zero." You can also claim " Married, but withhold at higher Single rate." if that fits.

See IRS W-4 Form at THIS LINK.

Ron
 

Tommycc14

Registered Member
Had my appointment with retirement services today and was inform I will get VA pay and crsc but no army retirement even tho my disability is combat related. Does this sound right to everyone?
 

RonG

Staff Member
PEB Forum Veteran
Registered Member
Had my appointment with retirement services today and was inform I will get VA pay and crsc but no army retirement even tho my disability is combat related. Does this sound right to everyone?
The purpose of CRSC is to replace some or all of waived retired pay (called VA offset).

The following is an example of a regular retirement with 100% VA comp:
  1. Retired pay 3000
  2. VA comp 3500
  3. Retired pay is reduced by amount of VA comp: 3000-3500 = zero retired pay
  4. 100% CRSC would replace the waived 3000 in retired pay for this regular retiree = 3000 CRSC
  5. The retiree would receive each month: 3000 CRSC + 3500 VA comp + zero ret pay = 6500
Note: This is not exactly how it works for a disability retiree; the example is to show the waiver of retired pay

A chapter 61 disability retiree with less than 20 years AD would receive CRSC that is the lesser of
Longevity portion of retired pay
OR
Approved CRSC percentage amount (rate mirrors amounts in VA comp tables).

Residual retired pay after the VA Offset/waiver reduces CRSC for CH 61 retirees.

Ron
 

Warrior644

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@Tommycc14,

Welcome to the PEB Forum! :)

Thus, I quite often comment that "possessing well-informed knowledge is truly a powerful equalizer!"

Best Wishes!
 
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