Released 7/17/18 at U.S. Senator John Boozman | Tags: Congressional Legislation
The Internal Revenue Service (IRS) is advising veterans who have been separated from service for combat-related injuries and received a severance payment that was improperly taxed to take advantage of the relief offered to them by the Combat-Injured Veterans Tax Fairness Act (P.L. 114-292), a law based off a bill authored by U.S. Senators John Boozman (R-AR) and Mark Warner (D-VA). Under federal law, veterans who suffer combat-related injuries and who are separated from the military are not supposed to be taxed on the one-time lump sum disability severance payment they receive from the Department of Defense (DoD). However, for years DoD improperly withheld taxes on these payments from thousands of qualifying veterans, who were typically unaware that their benefits were being improperly reduced. The Combat-Injured Veterans Tax Fairness Act rights that wrong, but affected veterans only have a short window in which to seek restoration. The IRS is advising qualifying veterans to file Form 1040X, Amended U.S. Individual Income Tax Return, to claim a credit or refund of the overpayment attributable to the disability severance payment.