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@CarolynCC137 Your pension distribution may be taxable if reported to you on a form 1099-R. You can enter that form in TurboTax to see if it affects your tax. You enter it in the Income and Expenses section of your federal tax return. Look for Retirement Plans and Social Security, then IRA, 401(k), Pension Plans (1099-R). Just complete that section by entering your form 1099-R information and answering the questions to see if your refund or tax due changes.
Did you ever find anything else out about this. I have asked and tried researching it myself to no avail. Although everyone I know has been approved for it.
I am starting my second year of military retirement and am 100% disabled as well- I've met vets that do not pay taxes on their retirement due to being 100% va disabled as per "page 18 of IRS PUB 525. While the publication reads pretty easy, filling out the paperwork is something that I have yet to get help with- any thoughts?
Please note (link below) that page 18 of IRS Tax pub 525 is being *incorrectly* interpreted by some VA rated Disabled Vets to exempt fed taxes on one’s military pension (a pension based on number of years of service). You have to read the pg18 wording carefully and note that it’s disability compensation that is excluded from fed taxes and that only in cases of disability retirement/disability pensions (not pensions based on number of years served ) do the provisions on page 18 apply. https://www.currentfederaltaxdevelopments.com/blog/2022/4/29/disabled-veteran-could-not-exclude-mili...
Also, just because one can convince DFAS to reduce their W-4 Fed tax withholdings based on one’s interpretation of Page 18 of IRS pub 525, it doesn’t mean that Military Pension Fed taxes aren’t still due to the IRS at the end of the tax year. The IRS (not DFAS) is the governing authority on taxable/non taxable income and their determinations on page 18 exceptions are stated on the link above. One’s tax withholdings, if under represented at the end of the tax year , can incur penalties. I hope this helps.
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