Congresswoman Johnson Applauds DOD Policy to Refund Taxes to Eligible Veterans who Received Disability Severance Payments

Statement

Congresswoman Eddie Bernice Johnson announced the Department of Defense is beginning to notify veterans who are eligible to receive a refund on taxes that may have been wrongly collected on their Disability Severance Payments by the IRS. Disability Severance Pay is not taxable as long as it is paid for combat-related injuries or the Veteran is also eligible for disability compensation from the Department of Veterans Affairs. DOD announced it will attempt to notify the more than 130,000 veterans identified as eligible for the refund, but explained the department may not be able to contact a number of potentially eligible veterans.

"Veterans who served our nation deserve our gratitude and should not be taxed for suffering an injury in service to our country," said Congresswoman Johnson. "I am pleased that the Department of Defense is correcting an issue in attempt to fairly treat veterans. The timetable to file for a refund is one year from the date of the DOD letter, and therefore, it's vital we quickly inform all veterans who are eligible to receive refunds but who may not receive notification.

"There is no higher calling then to serve our nation in uniform and we owe it to our veterans to treat them with fairness, decency and dignity. It is my hope that we will fully utilize this policy to return to our veterans what is rightfully theirs," said Congresswoman Johnson.

In order to file for the rebate, eligible veterans who receive the letter from DOD need to complete and mail IRS Form 1040X to the IRS at 333 W. Pershing Street, Stop 6503, P5, Kansas City, MO 64108 with a copy of their letter. Veterans who do not receive a letter are also eligible to file for the refund. Additional information can be found on the Defense Finance and Accounting Service website or on the information paper released by DOD.

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