DoD Announces Policy Change on Transfer of Post-9/11 GI Bill Benefits

Via DoD Announces Policy Change on Transfer of Post-9/11 GI Bill Benefits:


CTMCS (ret) Summary: DOD has changed policy to increase retention, mandating service members must be under 16 years TAFMS (or Selected Reserve), to elect a transfer to spouse or kids,  and must have 4 years service obligation remaining in order to transfer benefits.

The Defense Department issued a substantive change today to its policy on the transfer by service members in the uniformed services of Post-9/11 GI Bill educational benefits to eligible family member recipients.

Effective one year from the date of this change, eligibility to transfer those benefits will be limited to service members with less than 16 years of total active-duty or selected reserve service, as applicable.

Previously, there were no restrictions on when a service member could transfer educational benefits to their family members. The provision that requires a service member to have at least six years of service to apply to transfer benefits remains unchanged in the policy.

Focus on Retention

“After a thorough review of the policy, we saw a need to focus on retention in a time of increased growth of the armed forces,” said Stephanie Miller, director of accessions policy in the Office of the Secretary of Defense. “This change continues to allow career service members that earned this benefit to share it with their family members while they continue to serve.” This change is an important step to preserve the distinction of transferability as a retention incentive, she added.

If service members fail to fulfill their service obligation because of a “force shaping” event — such as officers involuntarily separated as a result of being twice passed over for promotion or enlisted personnel involuntarily separated as a result of failure to meet minimum retention standards, such as high year of tenure — the change will allow them to retain their eligibility to transfer education benefits even if they haven’t served the entirety of their obligated service commitment through no fault of their own.

All approvals for transferability of Post-9/11 GI Bill continue to require a four-year commitment in the armed forces and, more importantly, the member must be eligible to be retained for four years from the date of election, officials said.

The policy affects service members in the uniformed services, which includes the U.S. Coast Guard as well as the commissioned members of the U.S. Public Health Service and National Oceanic and Atmospheric Administration.

editor: emphasis added 

Combat-injured veterans tax relief

undoing the added insult to injury

Of all the things that politicians do that gets people’s dander up,  then-President Obama signed into law  a bill that rights a wrong for combat-injured veterans.   For more than a hundred-thirty thousand  veterans whose combat injuries ended their careers,  the government has ended taxing their severance pay.  The veterans affected served from 1991 (Desert Storm) through the present.

The IRS bulletin :

The Combat-Injured Veterans Tax Fairness Act of 2016, enacted December 2016, allows certain veterans who received lump sum disability severance payments additional time to file a claim for credit or refund of an overpayment attributable to the disability severance payment. The law directed the Secretary of Defense to identify disability severance payments paid after January 17, 1991, that were included as taxable income on Form W-2, Wage and Tax Statement, but were later determined to be nontaxable and to provide notice of the amount of that payment. The Department of Defense is mailing letters to affected veterans (letters 6060-A and 6060-D) in July 2018.

What this means for some veterans

Veterans discharged from military service due to medical disability may receive a one-time lump sum severance payment. Disability severance pay is taxable income unless the pay results from a combat-related injury or the service member receives official notification from the Department of Veterans Affairs (VA) approving entitlement to disability compensation.

Anyone who received a disability severance payment that was taxed and determines later that the payment qualifies under one of the rules above can file a claim for credit or refund for the tax year in which the disability severance payment was made and was included as income on a tax return.

For veterans who received a lump sum disability severance payment after January 17, 1991, the Combat-Injured Veterans Tax Fairness Act of 2016 may provide additional time to claim a credit or refund for the overpayment attributable to the disability severance payment.

What you need to do

You must complete and file IRS Form 1040X, Amended U.S. Individual Income Tax Return, for the tax year the disability severance payment was made carefully following the instructions in the notice mailed by the Department of Defense in July 2018. You must mail the claim generally by the later of:

  • 1 year from the date of the Department of Defense notice, or
  • 3 years after the due date for filing the original return for the year the disability severance payment was made, or
  • 2 years after tax was paid for the year the disability severance payment was made.

If you did not receive the notice from the Department of Defense and you received a disability severance payment after January 17, 1991, that you reported as taxable income, you can still file a claim as long as you attach the necessary documentation to your Form 1040X. You may contact the Defense Finance and Accounting Services to obtain your documentation for submission with the required Form 1040X. See the FAQs for additional information.

Text of the 2016 law:

https://www.warner.senate.gov/public/index.cfm/2016/12/senate-passes-bill-to-end-taxation-of-combat-injured-veterans-severance-payments

Ask the Chief: taxes

Retirement pay, states of residence and taxes

 

Edited and sourced  from military benefits :

I believe that we all should contribute what is fair to help our military and contribute to the efficient management of our nation.  That said, we all know that taxation is out of control in many states, without regard to the military service retiree’s sacrifice during their career.   This information should assist a veteran with decisions about where to spend retirement.

Compiled for 2018, a list of all 50 states that exempt (or don’t) all or a portion of military retirement pay.  When and where you settle, after retirement, is up to you, but having some current information should help you with “Uncle’s” hand in your pocket.

Summary:

  • NO personal income tax: 9 states
  • Full military retirement pay subject to tax: 8 states
  • NO tax on military retirement pay: 20 states
  • Partial tax on military retirement pay: 13

 

No state income tax ( no tax on retirement pay):

Alaska
Florida
Nevada
New Hampshire (dividend and interest taxes only)
South Dakota
Tennessee (dividend and interest taxes only)
Texas
Washington
Wyoming

8 States That Do Not exclude Military Retirement Pay from tax:

California
Montana
New Mexico
North Dakota
Rhode Island
Utah
Vermont
Virginia

20 States Don’t Tax Military Retirement Pay:

Alabama
Arkansas
Connecticut
Hawaii
Illinois
Iowa
Kansas
Louisiana
Maine
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
New Jersey
New York
Ohio
Pennsylvania
West Virginia (as of 2018)
Wisconsin

13 States With “Special Provisions” Or Other Consideration For Military Retirement Pay

Arizona – Military retirement pay may be excluded from state taxation up to $2,500.
Colorado – Depending on age, up to $24,000 of military retirement pay may be exempt from state taxes.
Delaware – Taxpayers up to the age of 60 may exclude up to $2,000 of military retirement pay, military retirees aged 60 or older exclude up to $12,500.
District of Colombia – Military retirement pay may be excluded from state taxation up to $3,000 for individuals 62 or older.
Georgia –  has a provision for any retirement income including military retirement pay. Taxpayers who are 62 or older, or permanently and totally disabled regardless of age, may be eligible for a retirement income adjustment on their Georgia tax return. Up to $35,000 ages 62-64 and $65,000 for 65 and older.
Idaho – Retirement benefits to a retired member of the military 65 or older, or disabled and age 62 or older are excluded from state taxes. Such deductions must be reduced by retirement benefits paid under the Federal Social Security Act or the Tier 1 Federal Railroad Retirement Act. The total maximum deductions vary each year.
Indiana – Military retirees may deduct the lesser of actual retirement pay or $5,000, whichever is less. Certain conditions may apply.
Kentucky – All military retirement pay is exempt from state income tax for those who retired prior to 1997. For those who retired after 1997, military retirement pay is subject to state tax when the pay exceeds $41,110.
Maryland – Military retirees don’t pay state income taxes on the first $5,000 of their retirement income. Those over age 65, or who are totally disabled, or who have a spouse who is totally disabled, receive additional state income tax breaks which may vary from year to year.
Nebraska – Retirees must choose (within two years of the retirement date) a seven-year exemption option of 40% or a lifetime exemption option of 15% starting at age 67.
North Carolina – Military retirement pay may not be taxed at all if it meets certain requirements including if the veteran was “vested in the retirement system” for five years as of August 12, 1989. Otherwise, tax exemptions may be applicable up to $4,000 for single returns and $8,000 for joint returns.
Oklahoma – Military retirement pay is exempt either up to 75% or $10,000, whichever is greater, but cannot exceed federal adjusted gross income.
Oregon – Military retirees may qualify for a “federal pension subtraction”. Those considered “special-case” Oregon residents will have their military retirement pay taxed as regular income.
South Carolina – Military retirees with a minimum of 20 years of active duty may exempt up to $3,000 until age 65, after which an exemption of $10,000 applies.
See: https://militarybenefits.info/states-that-do-dont-tax-military-retirement-pay/#ixzz5KmP3NLpq

 

VADM H. Denby Starling, II — honor365

Vice Adm. (ret) Starling began his last assignment as commander of Navy Cyber Forces at its establishment on Jan. 26, 2010. There he was responsible for organizing and prioritizing manpower, training, modernization and maintenance requirements for networks and cryptologic, space, intelligence and information operations capabilities. He concurrently served as commander Naval Network Warfare Command, where he oversaw the conduct […]

via VADM H. Denby Starling, II — honor365

Takes one to know one

The last time I boarded a vessel the size of the Allure of the Seas, it was gray and I was an enlisted volunteer(ed) carrying equipment. While an aircraft carrier does not deploy lounge chairs nor launch aircraft, on this voyage, my wife and I saw divers launch into a pool several decks above the waterline. This was all part of an entertaining acrobatic and sychronized diving show.

However, the most entertaining part of this trip has been having brief conversations with passengers who are fellow veterans. You see, I wore my “Retired Navy” ballcap boarding in Florida and disembarking on our first port of call. From the first greeting in the line with a retired Bo’sun while getting registered at the embarkation terminal, to the Air Force vet my wife and I sat with at a dinner, to the Navy Vietnam Nam-era airdale, there have been a lot of quick greetings and instant recognition.

” I can recognize veterans”, one Navy wife said.  I think she actually said, she could “smell ’em a mile away”, but I knew what she meant. I think people who served have an instant kinship. One of my fellow passengers, a man and his wife about half my age went snorkeling with my buddy, me and four others at our stop in Haiti. He smiled knowingly, when I remarked how cool it was to be zooming away toward our dive spot in a RHIB. Most Navy people recognize this acronym as Rigid Hull Inflatable Boat. Yet I think he or possibly his wife, was Dutch or German.

Yeah. The folks who are frequent cruise vacationing people also seem to have that camraderie. Many start around our age. I think cruise veterans and particularly Navy veterans get the best new sea stories to swap with one another from trips like this. It does “take one to know one”.

(Image) The last time I was off the coast of Haiti (USS PETERSON)

Veterans benefit

It is a long time in coming, but f you served, you may again be eligible for GI Bill Education benefits that you may have thought expired.

Sharing news from the Veterans Administration:

Dear Fellow Veterans and Colleagues,

As you know, the recent passage of the Harry W. Colmery Educational Assistance Act of 2017, also known as the “Forever GI Bill,” enacts several changes to the GI Bill that will positively impact Veterans and their families. Some of the changes became effective the day the law was signed, some next fall, and some in the future. In the months to come, I’ll be updating you on how this new law impacts VA education benefits and what actions Veterans may need to take.

Here’s a breakdown of some of the legislation that immediately went into effect with the President’s signature, and what it means for you.

The 15-year time limitation for using Post-9/11 GI Bill – The 15-year limitation to use benefits is removed for Veterans who left active duty on or after January 1, 2013, children who became eligible for the Marine Gunnery Sergeant John David Fry Scholarship (Fry Scholarship) on or after January 1, 2013, and all Fry Scholarship eligible spouses.

There is no action you need to take; if eligible, the limitation is simply removed for you.

Restoration of Benefits due to School Closure – We are now authorized to restore benefits and provide relief to Veterans affected by school closures or disapprovals.

If you attended courses or programs discontinued from January 1, 2015 to August 16, 2017, and attended an accredited institution of higher learning, and did not transfer any credits to a comparable program, entitlement will not be charged for the entire period of your enrollment. The law also provides separate criteria for partial benefit restoration for school closures after January 1, 2015.

To apply for restoration, we will develop a web page with instructions, information, and a form to complete and return. I will update you when this page is available, and we’ll post an announcement on our main GI Bill page and social media sites.

Independent study programs at career and technical education schools covered by GI Bill – This allows anyone eligible for GI Bill to use their benefits at an accredited independent study program at an area career and technical school, or a postsecondary vocational school providing postsecondary level education. A bit of background on this provision: before the passage of this law, most non-college degree programs weren’t approvable if any portion of it was online. This change allows those programs to be considered for approval even if some or all of the instruction is online/not in a classroom.

There is no action for you to take here, as these programs will go through the normal course of approval by the appropriate State Approving Agency. Any new programs will be added to our GI Bill Comparison Tool.

Reservists who had eligibility under the Reserve Educational Assistance Program (REAP) and lost it due to sunset of the program will have that service credited toward the Post-9/11 GI Bill program – We are in the process of identifying the approximately 2,800 Reservists affected by this and will send them letters with instructions.

I will update you when the letters go out, and what to do if you did not receive a letter but feel you may be eligible for this restoration. We will also post more information on the GI Bill web and Facebook pages.

These changes will greatly benefit our nation’s Veterans by providing expanded access and opportunity to access education benefits. I will continue to update you as we work out the details of this legislation.

As always, thank you for your service.

Regards,

Curtis L. Coy
Deputy Under Secretary for Economic Opportunity
Veterans Benefits Administration
U.S. Department of Veterans Affairs
Washington, DC 20420
VA Core Values: Integrity, Commitment, Advocacy, Respect, Excellence (“I CARE”)