Severance Pay Tax after PEB

There are so many differenct scenarios that it's hard to tell you exactly what to do but there's 3 main ways to get your money back:
  1. If you receive severance before the year end, you can reach out to DFAS and submit required paperwork
  2. If it's after year end, you can file in your return to get it back. You'll likely need the help of a tax professional or be willing to do the research to make sure you file it appropriately.
    • if it's recorded as income in your w-2 you will have to show in your return, that the severance shouldn't have been counted as income and then your total income on your return is reduced showing a tax overpayment and thus you get the taxed amount back.
  3. If it's more than a year ago, you have to file an amended return asking for a refund because you overstated your income on the previous return.


Here's all the links again to read through and figure out what scenario applies to you and how to go forward:




I was paid my severance January of this year. I asked my tax professional and he was clueless on what to do. So since I am still within the year, the form 1040x is the way to go?

I was 0% USAF and 100% P&T with the VA and actually had my official VA info before I was paid my severance but they taxed it anyways....
 
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