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Sep 16 11 8:34 PM
Sep 16 11 8:55 PM
Toadman wrote:Some folks here say that CRDP is Taxed and some folks here say it isn't taxed...(CRDP IS taxed....CRSC is NOT taxed)I thought CRDP wasn't taxed since it is a VA disability compensation. (Neither are VA Compensation...they are service issues)
Sep 16 11 9:34 PM
Sep 16 11 10:56 PM
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Sep 18 11 9:59 AM
Sep 18 11 11:11 AM
Toadman,Up until 2004 any amount a military retiree got from the VA (disability copmensation) was deducted from your military retirement, dollar for dollar. Then in 2004 they passed a law that would allow the military retirees, with over 50% VA disability to get their military retirement in addition to their VA Disability and called it CRDP. But the had to complicate it (just a rule the Government has) by not only requiring that the retiree have at lease a 50% disabilitu from the VA, but the CRDP would be phased in til 2014. In 2014 you wil get your full retirement in the form of CRDP (this is what the $23.00 on your RAS represents.)Do not confuse or combine VA compensation with CRDP. They are two seperate payments from two different sources. CRDP comes from DFAS as this is who you earned your military retirement from. VA comp comes from the VA because you had the misfortunt to get messed up somewhat whiles serving your country and earning that retirement from DFAS.VA compensation (for your disability) is never taxed.Your military retirement is taxed and CRDP is nothing more than the return of your military retirement so if it was taxable to start with, it is still taxable when it is returned to you as CRDP.
Again you are being paid by two different agencies, DFAS pays you military retirement/CRDP and the VA pays your disability compensation. As fare as you are concerned one has nothing to do with the other.
There is also CRSC which is also the return of your military retirement the same as CRDP except it is not taxed (your VA comp must be combat related to get this). Apparently you do not qualify for this so lets not go into it now and save you some more confusion.
I certainly hope this helps you to understand your pay situation and RAS better.
Sep 18 11 12:42 PM
Sep 18 11 3:05 PM
maparker wrote:Well, to throw in a curve...DoD disability retirement can be tax free if the member was obligated to enter service before some date in September 1975 (I don't remember the exact date) or if the disability retirement is due to a combat related condition.
So would CRDP (restoration or retirement pay) be taxed if the retirement pay is not taxable? Don't know the answer but it could make a difference.
MikeThe OP, Toadman, stated in his sentence "For military retired (20+ yrs) CRDP folks." that his concerns were about a conventional DoD LOS retirement—not a DoD disability retirement nor a Ch 61 retirement. As such, my response addressed his question.However, you do ask a good question. I, too, wonder if CRDP is based on a DoD disability retirement, would it be taxable? It seems IRS should make a ruling on this.
Sep 18 11 8:47 PM
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Dec 15 15 5:20 AM
Ron91 wrote:Re: "So... I have been getting $2331 for my retirement pay. I have now been rated 100%.... I will be getting taxed the same as always for the $2331 and 0% tax for the $3K disability. Is this what I should expect/"
1. You will have to waive retired pay dollar for dollar in the amount of VA compensation received. It appears from the information you provided that you will waive/lose all your retired pay. If you are otherwise eligible for CRDP (example: 20 years or more active duty and rated 50% or more) your waived retired pay will be restored by CRDP which is taxable. CRDP is restored retired pay.
2. VA compensation is not taxable.
3. If at some point you apply for CRSC and your application is approved, the amount of CRSC you receive is non-taxable. CRSC replaces some or all of waived retired pay for combat related disabilities.
4. You seemingly asked a question about CRDP, but you posted the question in the CRSC forum. See the following for more information about Concurrent Receipt: http://www.dfas.mil/retiredmilitary/disability/payment.html
CRDP and CRSC cannot be paid simultaneously; one must choose one or the other.
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