More than 130,000 U.S. veterans are owed significant tax refunds after they were mistakenly overtaxed for 25 years.
The Department of Defense recently discovered those veterans were taxed on their non-taxable disability severance payments.
“As long as this country has been doing these type of things, you would think that the system had worked out all the quirks,” said Five Star Veterans Center CEO Col. Len Loving.
Loving said he knew “a fairly large number” of veterans in Northeast Florida could have been affected.
He said he’s grateful that error has been discovered and that steps are being taken to reimburse the affected veterans.
Disabled veterans were mistakenly taxed between 1991 and 2016.
The government began sending those vets notification letters on July 9.
Those letters instruct affected veterans to fill out an amended return using the amount of improperly taxed income, or they can claim a standard refund amount.
The default refund amount is:
- $1,750 for tax years 1991-2005
- $2,400 for tax years 2006-2010
- $3,200 for tax years 2011-2016
“If someone qualifies all the way back to 1991, I doubt that they’re going to have the proof,” Loving said.
If a veteran does not have their tax return from the year they received that severance pay, they can request it from the IRS; but if it’s more than seven years old, the agency might not have it. In that case, the veteran may have to claim the standard refund being offered.
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