Veterans don't pay taxes

Discussion in 'Talkback' started by John Harrelson, Jan 7, 2008.

  1. John Harrelson

    John Harrelson New Member

    Recent VA News Releases

    To view and download VA news release, please visit the following
    Internet address::

    Pay in Vets' Work Program Ruled Tax-Free
    Ruling on Compensated Work Therapy Retroactive Three Years
    WASHINGTON (January 7, 2008) -- Payments provided to veterans under two
    specific programs of the Department of Veterans Affairs (VA) -- the
    Compensated Work Therapy (CWT) and Incentive Therapy (IT) programs --
    are no longer taxable, according to the Internal Revenue Service.
    Veterans who paid tax on these benefits in the past three years can
    claim refunds.

    Recipients of CWT and IT payments no longer receive a Form 1099
    (Miscellaneous Income) from VA. Veterans who paid tax on these benefits
    in tax years 2004, 2005 or 2006 can claim a refund by filing an amended
    tax return using IRS Form 1040X. Nearly 19,000 veterans received CWT
    benefits last year, while 8,500 received IT benefits.

    The IRS agreed with a U.S. Tax Court decision earlier in 2007 that CWT
    payments are tax-free veterans benefits. In so doing, the agency
    reversed a 1965 ruling that these payments were taxable and required VA
    to report payments as taxable income.

    The CWT and IT programs provide assistance to veterans unable to work
    and support themselves. Under the CWT program, VA contracts with
    private industry and the public sector for work by veterans, who learn
    new job skills, strengthen successful work habits and regain a sense of
    self-esteem and self-worth. Veterans are compensated by VA for their
    work and, in turn, improve their economic and social well-being.

    Under the IT program, seriously disabled veterans receive payments for
    providing services at about 70 VA medical centers.

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