In July 2018 the IRS announced that certain veterans who received disability severance payments after January 17, 1991 and included that payment as income should file an amended return (Form 1040X) to claim the credit or refund.
This is due to the Combat-Injured Veterans Tax Fairness Act of 2016.
Most veterans received a one-time lump sum payment when they separated from their military service. The veteran should be receiving a letter from the Department of Defense with information on how to claims the credits or refunds.
Typically, there is a statute of limitation on tax refunds. However, this payment has an alternative time frame. Veterans have one year from of date of the letter from DOD. Veterans can claim refunds all the way back to 1991.
The amount to claim will be based on the following standard amounts:
- $1,750 for tax years 1991-2005
- $2,400 for tax years 2006-2010
- $3,200 for tax years 2011-2016
If you are eligible for this claim please contact our office and our tax professionals can assist with the forms.