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Client Who Receives VA Benefit Monthly Award Amount

stephanie2
Level 2

I have a client who has a letter dated January 14, 2020, which is a summary of his VA benefits.  He is telling me his 1099-R (which has an amount listed in Box 2), is considered nontaxable.  I have been trying to find a specific answer but I see answers that say both yes and no.  I have looked over Publication 529 - Military and Government Disability Pensions and based on what I can tell, it doesn't sound like his 1099-R would be nontaxable.  Am I correct or am I completely incorrect?

Thank you in advance.

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3 Replies 3
IRonMaN
Level 15

VA disability benefits aren't taxable but they don't get reported on a 1099R.  So I'm guessing what is on the 1099R aren't disability benefits but are regular pension benefits.

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stephanie2
Level 2

That is what I am explaining to him, that if his pension is marked as taxable income and is code 7, those are not considered a VA benefit.  

 

Thank you for your answer.

IRonMaN
Level 15

You betcha!

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