No, your VA Benefits are not taxable income.
The following is taken directly from the IRS website IRS Information
for Veterans:
"VA Disability Benefits
Do not include disability benefits you receive from
the VA in
your gross income. In particular some of the payments which are considered
disability benefits include:
- Disability compensation and
pension payments for disabilities paid either to Veterans or their
families,
- Grants for homes designed for
wheelchair living,
- Grants for motor vehicles for
Veterans who lost their sight or the use of their limbs, or
- Benefits under a
dependent-care assistance program."
Additionally, education and training benefits provided to
veterans under the GI Bill are not taxable income. [Emphasis added]
Additionally, please be aware that, under the "no double benefit" rule, amounts of otherwise qualifying tuition and fees paid for with VA benefits cannot be used as the basis for claiming the American Opportunity Tax Credit, the Lifetime Learning Credit, or the tuition and fees deduction.
