This applies to me:
"Retroactive VA determination. If you retire from the armed services based on years of service and are later given a retroactive service-connected disability rating by the VA, your retirement pay for the retroactive period is excluded from income up to the amount of VA disability benefits you would have been entitled to receive."
My determination was effective Feb 1, 2010. I continued to receive my full military retirement until 1 Oct. Then, my reserve retirement was reduced by the amount of my VA compenstaion.
QUESTION: Does anyone know howI exculde the amount of the RETROACTIVE VA compensation (Feb 1 to Sep 30) from the taxable amount shown on my DFAS 1099? What from to use?
I can't find the answer at the IRS site.
This question applies to my 2010 tax return which I have not yet submitted; therefore, filing a 1040-X is not the answer.
I'm sure that one or both of the Daves will have your answer. They be passing this way shortly.
"When you have eliminated the impossible, whatever remains, however improbable, must be the truth." ... Sherlock Holmes The Sign of Four 1890 ... Sir Arthur Conan Doyle
Founding Member Original DVG & Proud Member, Rupterd Duck/Derelict Veterans
All you need to do is subtract the amount from your taxable income. Some where in your return note that you received a retroactive rating from the VA.
I actually did what you suggested yesterday before posting my question and it wasn't flagged by the Turbo Tax error check,.
And DFAS further advises to 'attach copies of the VA award letter and the (DFAS)Account Statement to your tax return to substantiate ypur entitlement to the exclusion.'
Seems so simple; I guess that after paying taxes forever, it's hard to accept that the IRS doesn't need another form or two for something so basic.
I did that once and filed I think 5 1040X. I only went with statements that it was due to VA backdated ratings, but including the VA letter won't hurt.
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