• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

US Military

  • Branches
    • Army
    • Navy
    • Air Force
    • Marine Corps
    • Coast Guard
    • National Guard
    • Air National Guard
    • Find A Recruiter
  • Find A Recruiter
  • Military Benefits
    • GI Bill
    • VA Loans
    • Military Scholarships
    • Military Friendly Colleges
    • Money
  • Jobs
    • Military Pay Chart
    • Veteran Jobs
    • Civilian Jobs
  • VA Loan Rates
  • Military News
    • Top News
    • Benefits
    • Careers
    • Education
    • Featured Columnists
      • Larry Fowler
      • Scott Ostrow
      • Kim Lengling
      • Dr. Sasha Toperich
      • Rick Stewart
  • GI Bill
  • VA Loans
  • Military Scholarships
  • Top Military-Friendly Colleges and Universities in America

Disabled Veterans Tax Free Benefits

January 28, 2008 By admin

There is a new benefit available to Veterans who paid taxes on some of their compensated work therapy programs in the past. Due to the passage of recent legislation, veterans who paid tax during the last three years can claim refunds.

Interested In Rejoining?

Previously payments made to disabled veterans under the department of VA compensated therapy for work program were taxed for those funds. People who receive these funds will not have to receive a form 1099 from the IRS according to the recent ruling. Benefit years 2004, 2005, 2006 are able to now claim a refund by using tax form 1040X. This is thought to be about nineteen thousand veterans that were paid CWT funds and were taxed on it.

This stems from a U. S. Tax Court decision issued previously in 2007. The tax court held that payments such as CWT funds are used to provide help and assistance to veterans and as such should not be taxed. The IRS reversed itself, in going back against a decision from 1965. In the 1965 decision the IRS declared the payments were taxable income and directed the Veterans administration to issue Form 1099 yearly so veterans could pay taxes on this money.

The CWT program supports assistance of various natures to veterans that cannot support themselves or work. The VA finds businesses and private industries to work with veterans, and includes re learning job and work habits, and intensive on the job training. By incorporating businesses the VA gives veterans the benefit of trained people who are already successful teaching and mentoring their rehabilitation progress. This makes for successful partnerships, and increased self-esteem on the part of the Veteran.

Here are some questions and answers about the new changes and benefit.
I currently participate in CWT programs, with the VA? So these are still ones I have to pay tax on? No, due to the recent ruling by the IRS and the Tax court action, the CWT benefits are not taxable any longer. In fact you will be able to receive a refund for any taxes you paid for 2004, 2005 or 2006.

So I can file for a refund for those years for my CWT tax that I paid in. Is this something that I have to do, am I required to amend my prior year tax returns and collect this refund? No, due to the recent change in IRS tax ruling, you owe no federal tax from this point on, and you CAN (not have to, but can) receive a refund for 2004-2006. If you paid taxes on the CWT benefits for those years, you can file for a refund. If you don’t, the Federal Government will just keep your money. They wont sent it to you unless you apply for a refund.

Filed Under: Benefits, Updates

Recent Posts

  • What Makes Navy SEALs The Best Special Forces Operators in the World Today?
  • How Was Military Time Created And Why?
  • The Best 5 US Military Bases In The World
  • Congrats To Recent Graduates And Is The Military A Great Place For Young People Today
  • The Best Jobs in the United States Army
VA Loans

Primary Sidebar

IMPORTANT DISCLOSURE

USMilitary.com is a privately owned website and is NOT AFFILIATED (or endorsed) with the U.S. GOVERNMENT, U.S. ARMED FORCES, or DEPARTMENT OF VETERANS

USMilitary.com Career Guide

Sign up to receive USMilitary.com email updates and to hear what's going on with all military branches!

Featured Columnists

Larry Fowler

Larry Fowler is the publisher of USMilitary.com Network one of America's premier privately owned

Do You Know The Army’s Most Dangerous Jobs?

Scott Ostrow

Lt Col (Dr.) Scott A. Ostrow retired from the Air Force in September 2005 and has been teaching

Congrats To Recent Graduates And Is The Military A Great Place For Young People Today

Kim Lengling

Kim Lengling is a Air Force Veteran whose passion is to help support veterans and their

This Memorial Day: The Knock On The Door

Dr. Sasha Toperich

Dr. Sasha Toperich is the Senior Executive Vice President at Transatlantic Leadership

Sarraj’s Dangerous Dance With Power

Rick Stewart

Rick Stewart is a former United States Air Force Survival, Evasion, Resistance, and Escape (SERE)

Announcing American Patriots Unsung Magazine

Nathan B. Nelson

Capt (ret) Nathan B. Nelson is the Director of Military Affairs for the 1st Congressional district

Three Critical Considerations for Every Veteran Prior to Leaving Active Duty

Laquan Daniels

Laquan Daniel is a military recruiting expert with over 17 years of specialized experience in the

Important News For Military Transitioning Veterans

Veteran Buzz

High-Paying Jobs for Military Veterans

5 High-Paying Jobs for Military Veterans

July 2, 2018 By Ben Ehinger

High Paying Jobs Not Requiring a Degree

June 28, 2018 By Ben Ehinger

7 Best Military Careers That Lead To High Paying Civilian Jobs

June 10, 2018 By larryf

VA Loans

Footer

  • Advertise With Us
  • Privacy Policy
  • Write For US
  • Link to Us

Recent

  • What Makes Navy SEALs The Best Special Forces Operators in the World Today?
  • How Was Military Time Created And Why?
  • The Best 5 US Military Bases In The World
  • Congrats To Recent Graduates And Is The Military A Great Place For Young People Today
  • The Best Jobs in the United States Army

Search

© Copyright 2022 USMillitary
Web Design by Goebel Media Group


THIS IS A PRIVATE WEBSITE THAT IS NOT AFFILIATED WITH THE U.S. GOVERNMENT, U.S. ARMED FORCES, OR DEPARTMENT OF VETERANS AFFAIRS. U.S. GOVERNMENT AGENCIES HAVE NOT REVIEWED THIS INFORMATION. THIS SITE IS NOT CONNECTED WITH ANY GOVERNMENT AGENCY.