No, VA’s disability compensations are not taxable.
Veterans Affairs (VA) offer compensation or monetary benefits to veterans who have suffered injuries or developed illnesses due to their time in service. If you are wondering whether you need to pay taxes on these benefits you are receiving from the VA, the answer is no.
VA disability benefits are considered non-taxable by the Internal Revenue Service (IRS). According to IRS Publication 525, “Disability compensation and pension payments for disabilities paid either to veterans or their families” – are non-taxable and don’t need to be included in your income tax return.
Therefore, if your only income source is VA disability benefits, you don’t even have to file taxes. In contrast, if you have a job alongside being in the VA compensation program, you only need to file taxes for the income from the employment.
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How do I file my VA disability income on my taxes?
You do not have to file taxes on your VA disability compensation. The IRS does not consider disability benefits taxable, and this income also does not qualify for Earned Income Tax Credit.
Can the IRS take my VA disability check?
If someone is receiving disability payments from the VA due to a service-related disability, the IRS cannot seize or take away those payments as part of a tax levy. – Sources
Will I lose my VA disability if I get a job?
Veterans who are receiving VA disability compensation can still be employed. Therefore, they may have to pay taxes on their employment income but not on VA benefits.
Conclusion
To sum up, you do not have to pay taxes on your disability benefits provided by Veterans Affairs. If you have not applied for your VA benefits yet, VA Disability Coach can help you through the process.