For taxation purposes when you receive a form 1099-R from DFAS for retirement pension that is taxable income and reported by entering your 1099-R information. This pay is for years of service.
When you receive disability payments from the VA they are not reported to you on a tax form and you do not enter them anywhere on your tax return; this is a disability pension.
If a veteran is receiving full retirement and full disability under concurrent receipt the retirement from DFAS is taxable and reported on the 1099-R while the VA disability is not reportable.
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