Tax season guidance for Veterans: Maximizing benefits, accessing free assistance and avoiding scams

As tax season approaches, Veterans are hard at work gathering any and all necessary financial documents and consulting with tax professionals. The Department of Veterans Affairs (VA) wants Veterans to know they may qualify for special tax breaks and free assistance programs to help them navigate the filing process and maximize their returns.

Whether a Veteran chooses to file their taxes independently or uses a tax professional, the VA encourages Veterans and their loved ones to review the following tips and resources to both help them navigate the tax season with confidence and to avoid tax season scams.

-Tax benefits as a Veteran: Disability benefits received from VA should not be counted as part of a Veteran’s gross income. Payments from compensation, pension, Veteran Readiness & Employment (VR&E), and education—including the G.I. Bill—are exempt from taxation. Always review the Internal Revenue Service’s webpage on Veterans tax information and services before submitting a tax return.

-For Veterans who receive disability benefits from VA, refer to Internal Revenue Service (IRS) Publication 525 under “Military and Government Disability Pensions” for more information.

Veterans may be eligible to claim a federal tax refund based on an increase in their VA disability percentage (which may include a retroactive determination).

-Combat-disabled Veterans who are granted Combat-Related Special Compensation after an award for Concurrent Retirement and Disability may be eligible to claim a federal tax refund.

-Free tax assistance programs: Veterans have access to several free tax assistance programs.

-IRS Free File: If a Veteran’s adjusted gross income is $79,000 or less, they can file electronically with an IRS Free File software provider. If their income is higher, they can use Free File fillable forms.

-In-person help: If a Veteran’s adjusted income is $64,000 or less, if they have a disability and/or need language support, or if they are 60-years old or older, they can receive free in-person help from an IRS-certified volunteer.

-Military OneSource: Use the MilTax software to file federal and state returns for free for up to 365 days after military separation or retirement. For information on other topics, visit MilitaryOneSource.mil or call 800-342-9647.

As always, the VA recommends verifying communications, especially when handling private information such as social security numbers. With the increasing sophistication of scams targeting Veterans, it’s important to distinguish between legitimate and fraudulent communications from the VA. The VA will never send text messages to confirm or request personally identifiable information (PII) for benefits or federal payments.

The tax filing season has increasingly become a prime opportunity for scammers to exploit unsuspecting taxpayers through various communication methods. Refrain from sharing PII, including VA.gov logins, VA NCC personal PINs, dates of birth, military entrance/discharge details, branches of service or SSNs.

Tax season can be stressful, but Veterans can avoid scams and protect their finances by increasing their knowledge and taking precautions. Understanding Veterans’ tax benefits, choosing a trusted professional or service, recognizing scams and safeguarding PII are all steps to ensure a safe and secure tax filing experience.

If Veterans encounter a tax scam, they should report it to the appropriate authorities. Reporting scams helps protect others from becoming victims and assists in the investigation and prosecution of bad actors. For more information and to report an abusive tax scheme or a tax return preparer, visit Report a tax scam or fraud | Internal Revenue Service (irs.gov).

For more information, please visit www.irs.gov/individuals/veterans-tax-information-and-services