Tax Season

  
Tax season is approaching (23 Jan) and most of you are getting documents in the mail, or wondering why you aren't. Here is some information for most of the commonly asked questions about taxes.
 
Military pay (Retirement and CRSC) - Military pay comes from DFAS and information can be found on MyPay, including statements showing that your retirement pay is exempt from taxes if your retirement is combat related. If your pay is tax exempt, you will NOT receive a 1099-R (retirement W-2) from DFAS.  If you were on duty at any time during 2016, your W2 is available on MyPay.  CRSC monthly statements are also on MyPay. While in MyPay, ensure your mailing address is correct - DFAS has no way of knowing if you moved unless you tell them, the VA does not tell them, nor does Tricare/DEERS.

VA Disability Pay (compensation & caregiver) - ALL pay from VA is tax exempt. You will NOT receive any type of statement for filing taxes because you did not pay taxes.  Payments from VA usually show up as deposits from US Treasury - VA.  (CP stands for compensation & pension, CH 31=Voc Rehab, Ch 33=Post 9/11 GI Bill, and Ch 30 is the Montgomery GI Bill).  Do not include VA payments as part of your gross income.

Social Security Disability (SSDI) - SSDI is not always tax-exempt, it depends on taxable income of the household. You WILL receive a Form SSA-1099 from Social Security. If you did not get one, you need to ensure they have your right address. You can also create an online social security account.
 
**You can list tax-exempt income on your taxes as "nontaxable income"; in some situations I am told it is beneficial.
 
Here are the links for the information:

DFAS: https://www.dfas.mil/retiredmilitary/manage/taxes.html

VA: http://www.benefits.va.gov/compensation/

Social Security: https://www.ssa.gov/planners/taxes.html

IRS (Military and Retired Military): https://www.irs.gov/individuals/military
 

2017 VA Rating

  
VA rating payments for 2017.  The increase is about $2 to $10/per month based on your percentage (0.3%)
For those receiving SSDI (Social Security Disability Insurance) the benefits will increase by 0.3% which is just a few dollars. However, Medicare costs are going up to and that increase will almost completely offset any raise in SSDI.
  
VA Rates 2017

Date published: April 19, 2016.
​Article by Kristi Muse

How Divorce Can Affect Your Military Pay

Divorce is an emotionally and financially trying time for anyone, civilians and military members alike. However, if you are a military couple going through a divorce, there are laws and factors unique to a military divorce that can affect how you split your assets, including your pay and eventually, your retirement pay.
If you are a military member and you’re seeking a divorce, it’s important to understand how divorce will affect your pay. The following article will hopefully shed light on some of your questions as you move forward with divorce proceedings. Please keep in mind, divorce proceedings are held at the state level and laws vary by state. As such, divorce laws, especially as they pertain to the military, can be very complicated. This should be considered general information, and not taken as legal advice. Please seek legal council for specific questions about your situation.
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Compensation Table

Table
Current compensation table.
  
Military retirees can automatically send some of their retired pay to another institution through an allotment (payroll deduction) just as they did while on active duty.


Please note that any allotments that were established for less than 30 days prior to the time of your retirement will have to be re-established. Since your retirement pay will be less than your active duty pay, it's vitally important to ensure that you have enough in your account to cover these allotments. If not, some allotment(s) might be unpaid, which could make you subject to penalties and/or a loss of some benefits.


Retired Guard/Reserve
Those who have retired from the Guard/Reserve prior to the age they can collect their retirement pension (gray-area) will not have access to their DFAS account. It will remain dormant until such time as your retirement application is processed. At that time, your account will be reopened and you may establish new allotments.


Medicare Part B
Military retirees who are using Medicare as their primary health insurance and TRICARE for Life (TFL) as their secondary will need to purchase Medicare Part B to use TFL. If you are collecting Social Security, your Medicare Part B costs will be automatically deducted from your monthly Social Security payments. However, if you are NOT collecting SS benefits yet, you will be billed directly. Due to certain rules, military retirees may not pay Medicare Part B costs by allotment through DFAS or the Coast Guard Retiree & Annuitant Services (RAS).