(WTVY) — More than 133,000 veterans may qualify for a refund of federal taxes paid on disability severance pay dating back almost three decades.
Military.com reports that for years the Defense Department improperly withheld taxes from unsuspecting veterans.
The Pentagon is currently notifying veterans who could be eligible for the refunds. Under federal law, veterans who suffered combat-related injuries and are separated from the military are exempt from taxes on one-time lump sum disability severance pay.
In 2016, Congress passed the Combat-Injured Veterans Tax Fairness Act requiring the Pentagon to identify the veterans whose benefits were reduced and notify them of the amount that had been improperly withheld. The notification will also provide instructions on filing for the refund.
Eligible veterans will have one year after they receive the notification to file for a refund.