DMarkM1,
I have read your March 2, 2020 response a few times and understand your point that retirement pay is taxable. However, I have several retired friends that state your answer is not true. Both have filed W-4's with DFAS stating in block 4(c), "Exemption for 100% Disabled Veteran." Both confirmed that DFAS received, processed their W-4's and stopped their tax withholdings.
Again, I have personally read both IRS publications 524 and 525, but I cannot find in either where it states, 100% disabled veterans retired pay "will not" be taxed. However, on page 18 of 525, it does state, "Service-connected disability. You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services."
Could you please direct me to the source(s) where you got your information. In my opinion, both IRS publications are vague and subjective.
Thanks in advance for your response.
