HMC-FMF-PJ
05-02-2008, 01:32
Veterans’ Work Program Ruled Tax-Free
Some May Be Due Refunds for 3-years
http://www1.va.gov/opa/pressrel/pressrelease.cfm?id=1441
http://www.irs.gov/newsroom/article/0,,id=176442,00.html
Payments provided to veterans under the Compensated Work Therapy (CWT) and Incentive Therapy (IT) programs are no longer taxable. Recipients of CWT and IT payments no longer receive a Form 1099 (Miscellaneous Income) from VA. Veterans who paid tax on these benefits in tax years 2004, 2005 or 2006 can claim a refund by filing an amended tax return using IRS Form 1040X. In 2007, nearly 19,000 veterans received CWT benefits last year, while 8,500 received IT benefits.
The IRS agreed with a U.S. Tax Court decision earlier in 2007 that CWT payments are tax-free veterans benefits. In so doing, the agency reversed a 1965 ruling that these payments were taxable and required VA to report payments as taxable income. Fund payments are intended to furnish veterans with work skills training, employment support, and job development and placement services, although the primary objective of the program is therapy and rehabilitation.
Some May Be Due Refunds for 3-years
http://www1.va.gov/opa/pressrel/pressrelease.cfm?id=1441
http://www.irs.gov/newsroom/article/0,,id=176442,00.html
Payments provided to veterans under the Compensated Work Therapy (CWT) and Incentive Therapy (IT) programs are no longer taxable. Recipients of CWT and IT payments no longer receive a Form 1099 (Miscellaneous Income) from VA. Veterans who paid tax on these benefits in tax years 2004, 2005 or 2006 can claim a refund by filing an amended tax return using IRS Form 1040X. In 2007, nearly 19,000 veterans received CWT benefits last year, while 8,500 received IT benefits.
The IRS agreed with a U.S. Tax Court decision earlier in 2007 that CWT payments are tax-free veterans benefits. In so doing, the agency reversed a 1965 ruling that these payments were taxable and required VA to report payments as taxable income. Fund payments are intended to furnish veterans with work skills training, employment support, and job development and placement services, although the primary objective of the program is therapy and rehabilitation.