How to Claim Veterans Disability Benefits for Taxes

If you are suffering from serious disability due to your time in the military, you are entitled for veterans’ disability benefits. While the amount will vary, depending on your disability, it is important to note that the Internal Revenue Service will usually not consider these benefits as taxable. That will only be in cases where VA benefits are your only source of income. In special cases, filing for taxes may see you qualify for stimulus payments and other credits.

Instructions

  • 1

    VA benefits come in the form of monthly payments from the U.S government. In order to qualify for these, you must meet certain criteria. Broadly, it states that you must have served for a specified number of days, and that your injury is service-connected. The benefits will then be calculated in percentages, where for instance, if a person suffered 10% disability, he will receive considerably less in than the person who is 50 or 100% disabled.

  • 2

    As this income has no relation with your tax returns, the choice will be up to you if you wish to file for taxes. However, the disability status will have a direct impact on your tax return because any amount exceeding your benefit may be taxed. For instance if you receive an annual income from your service related benefits in the region on $6000, and depending on your disability, if you are entitled for $5000, then $1000 may be taxable.

  • 3

    While this may put you off, but it is still wise to file your taxes as you be entitled to receive some benefits.  Many states offer rebate, tax credits, or other reductions in taxable income, and the only way to claim tax-related benefits is to be not among the category of non-filers.

  • 4

    The filing procedure is relatively a straight forward one, where you will need to provide general information such as filing status and social security numbers etc. Having done that, you can research related federal laws in your state and how you may be eligible for a refund, or any income credit which is directly related to your tax liability. Moreover, you may be entitled for heat credits during winters.

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