Tax Form for Disability Veteran – Veterans’ Affairs

Veterans’ Affairs (VA) offers various benefits to disabled veterans, especially in terms of taxation. Considering the number of benefits, it may be quite challenging to figure out which ones are taxable or not. Also, one of the most commonly asked questions is which tax forms you need to file with the IRS.

If you have questions in mind, then we encourage you to take a look at this guide. We assure you that the following information will provide clarity in terms of disabled veteran benefits.

Which Forms Are You Going to Need for Income Tax Returns?

When your disability rating percentage increases, you will need to file a federal tax refund. As you may guess, you will also file certain forms for retroactive disability benefits. On the other hand, if you receive combat-related special compensation, you will also file a federal tax refund. All these individual scenarios require different forms to be filed.

For example, you need to use Form 1040X, which is also known as the Amended US Individual Income Tax Return Form, when you are going to file an amended tax return. The IRS will use this form to make corrections to your previous forms, such as Forms 1040EZ, 1040A, or 1040.

Unfortunately, you need to send this form via mail because the IRS does not accept it electronically. It is worth noting that you need to include all your VA documents in your mail. Additionally, you will also need to include any file you have received from the Defense Finance and Accounting Service.

On the other hand, if you have received Form 1099-R from the Defense Finance and Accounting Service, you will not have to file Form 1040X. The Form 1099-R will provide details about your taxable income portion. Moreover, it indicates that all the adjustments for your non-taxable awards have already been made.

Tax Form for Disability Veteran - Veterans' Affairs

Which Disability Veteran Benefits Are Tax-Free?

Disabled veterans are exempt from taxes when they are going to benefit from any of the following benefits:

  • All benefits are provided under the Veterans’ Affairs dependent-care assistance program.
  • Specialty vehicle design grants are provided by the Veterans’ Affairs for veterans who lost one or more of their limbs or sights.
  • All Veterans’ Affairs grants to make their homes accessible or grants for veterans in wheelchairs.

Veterans who benefit from the above-mentioned tax-free disability opportunities don’t have to file any form together with their federal return. All these disability benefits are automatically processed by the IRS without the need for any notice or filing forms.

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