How do you know how much of your distribution on form 1009-R from your military retirement pay is taxable and what percentage is due to disability?

[littlestreams]

I am doing my fathers taxes as he passed away and he received a 1099-R form that shows his taxable amount in box 2a.  But the "total distribution" box is not checked.   The "taxable amount not determined" box is not checked either.   He does receive disability pay for his service but he only received one form.  He also retired before 1975 so is all of his retirement pay tax free?  

[littlestreams]

Sorry, I meant to type 1099-R form.

[gloriah5200]

Military retirement pay is generally fully taxable when it is received if the military paid the contributions to the military retirement plan. Since your father retired before 1975, then he did not pay any of the contributions to the plan and the full distribution is taxable.  That can also be verified since the box 2a taxable amount matches the total distribution in box 1.  Additional confirmation of that is also the fact that neither box in 2b has been marked showing that the amount entered in box 2a is the taxable portion.

If the military member has received a VA disability award, then part of his military retirement may have been tax-free and not reported on the 1099R for the military retirement pay distribution.  VA Benefits are not taxable.

For additional information please refer to the instructions for the boxes on Form 1099R at the following link:

Form 1099R and line by line instructions

[littlestreams]

Thanks gloriah5200, he did receive VA benefits and the amount he received monthly does add up to the total on the 1099-R form.   The government has not even been supplying this form for years.  I am assuming it is because he passed away and the benefits switched over to my mom as his survivor.   Would the tax being different because of this change?  He has been told for years that his pay is tax free! 

The information on the Turbotax under "do i need to report me veteran disability payments"  states that you don't need to report your disability payments if these conditions apply:  You were entitled to receive a disability payment before Sept. 25, 1975.  Or You were a member of the applicable government service before Sept. 24, 1975.  

So I am thinking that the survivor benefit is being handled differently?  Now taxable? 

[AmyC]

Yes, there can be a change and create a taxable event. The Military retirement page has information on the different types of retirement and their taxability. See Understanding Tax Benefits for Survivors | Military.com

[littlestreams]

Thanks for the links.  The best I can figure out is that my mom does not owe Federal taxes or state taxes on his payments from his pay from the government.  DIC payments are not subjected to income tax. 

[AmyC]

If box 2a is the DIC, then it is not taxable. Being in box 2a just does not make sense for DIC though. Maybe she gets more money than DIC. Survivor benefits would be taxable.