November 11th, known nationally as Veterans Day, honors veterans around the world with events and specials at all kinds of restaurants and retailers. The IRS also offers veterans special benefits when it comes to filing and preparing their taxes. The IRS works with the community and other government partners to provide timely tax-related information to Veterans about tax credits and benefits.
The IRS and the U.S. Department of Veteran Affairs entered a Memorandum of Understanding in 2015 with the primary focus of it being to provide free tax preparation services to Veterans and their families. Partnering organizations prepare tax returns free for those whose incomes are low to moderate.
Veterans are eligible for various tax credits including the Earned Income Tax Credit. The Earned Income Tax Credit is a refundable federal income tax credit for low-to moderate-income, working individuals and families. To qualify for the credit, you must meet certain requirements and file a tax return even if you don’t owe or are not required to file.
Veterans can also be eligible to claim a federal tax refund based on:
- An Increase in the Veteran’s percentage of disability from the Department of Veterans Affairs
- or the combat-disabled Veteran applying for, and being granted, Combat-Related Special Compensation, after an award for Concurrent Retirement and Disability
Special Tax Considerations for disabled Veterans occasionally result in a need for amended returns.
Don’t forget you don’t need to include disability benefits you receive from the VA in your gross income. Some of the payments which are considered disability benefits include:
• Disability compensation and pension payments for disabilities paid either to Veterans or their families
• Grants for homes designed for wheelchair living
• Grants for motor vehicles for Veterans who lost their sight or the use of their limbs
• Benefits under a dependent-care assistance program
If you qualify for some of these benefits, you can apply online using the eBenefits portal. Veterans can use the portal to apply for Veterans’ Benefits Online, access VA Payment History, apply for VA Home Loan Certificate of Eligibility, check on Compensation & Pension Status, and more.
For those of you who are currently serving and are considered Active Duty, you can check out the IRS’s page for Military Members to find out all the benefits you can receive.