Once veterans start receiving disability benefits from the VA Administration, they often question whether or not the compensation payments are taxable. According to the US Department of Veterans Affairs, VA benefits are tax-free for veterans diagnosed with service-related sicknesses, physical injuries, mental health conditions, and eligible family members.
Understanding the eligibility requirements, application process, and proving disabilities through verified testing to determine monthly benefits compensation can be confusing. However, a VA benefits attorney can guide you through the procedure.
Non-Taxable VA Disability Compensation
The Internal Revenue Service informs veterans to exclude VA disability payments as gross income on their federal income tax returns to avoid paying taxes. Under the guidelines and rules of the US Department of Veterans Affairs, disability benefits paid monthly to veterans and eligible dependents are non-taxable by the IRS.
VA Disability Benefits Eligibility Requirements
The two main VA disability benefits eligibility requirements are:
- Veterans must have an existing medical or mental condition, such as an illness or injury affecting the body or mind.
- They served on active duty and military training (active-duty or inactive-duty).
Additionally, veterans must prove they received injuries or became sick while serving in the military when filing an in-service disability claim. If they had an injury or illness before joining the army or navy, for example, they should file a pre-service disability claim. File a post-service claim if the disability relates to an active-duty service after the service ended.
Disabilities are presumable when the chronic illness is long-lasting and occurs within one year after the discharge or as a result of hazardous materials or toxic chemicals. Another presumable disability is a physical or mental illness caused by a veteran held as a prisoner of war (POW) while serving in the military.
Cognitive Disorders Covered by VA Disability Benefits
The Veterans Benefits Administration offers VA compensation for cognitive disorders to eligible applicants for neurocognitive disorders, known as mental disorders. After meeting the eligibility and testing requirements, the Administration will determine the rating schedule for mental disorders, such as PTSD, using a formula.
VA disability benefits cover the following conditions and more:
- Anxiety Disorder
- Post-traumatic stress disorder (PTSD)
- Alzheimer
- Parkinson
- Other neurocognitive disorders
Rating Schedule for Cognitive Disorders
As of 2022, veterans and their spouses, parents, or children are eligible to receive monthly payments based on a rating formula at zero, 10, 30, 50, 60, 70, or 100 percent.
A zero rating means the veteran has no signs of severe symptoms to prevent occupational and social functionality or requires prescription medications. Although the Veterans Benefits Administration will not issue compensation to veterans with such rating, they will receive a formal diagnosis of the mental disorders.
With a disability rating of 30 percent, for instance, the monthly payment for a veteran with no spouse, parent, or children can reach $467. At 60 percent, it can go beyond $1,000. With a 30 percent rating, one child, and no spouse or parent, the veteran can receive a monthly payment of approximately $500.
If a rating is 70 percent, the compensation can be over $1,500 monthly. Finally, a 100 percent rating can go beyond $3,000. Children under 18 can receive close to $100 per month. For those over 18 enrolled in a qualified program, the monthly compensation can be close to $300.
What Veterans Can Do When the Veterans Benefits Administration Denies Their Claims
When the Veterans Benefits Administration denies VA disability claims, veterans can choose from three optional decision reviews, including the Board Appeal, Higher-Level Review, and Supplemental Claim. Each option allows veterans to continue their cases for reconsideration after the process changed after February 2019.
Consult with a reputable legal representative to learn about veterans’ rights and benefits. A lawyer specializing in veterans’ disability benefits can help file claims and appeals. Remember, veterans, do not pay federal income taxes on disability compensation at the end of the tax year because it is tax-free.
Leland D. Bengtson
As a journalist, Leland D. Bengtson dedicated most of his career to law reporting. His greatest satisfaction is to convey legal matters to the public in a language that they can understand. He is active on various platforms and media outlets, writing about common legal issues that people confront with every day. While medical malpractice is his strong suit, Leland covers plenty of other topics, including personal injury cases, family law, and other civil and even criminal legal matters.
