Veterans will see a bit more cash in their retiree, VA and Social Security checks come 2020, and the IRS wants to remind them that veterans may also qualify for some tax benefits that may have escaped their notice.
Military.com reports that military retirees, recipients of disability or other benefits from the Department of Veterans Affairs, federal retirees and Social Security recipients will all see a 1.6 percent increase in 2020’s monthly checks.
While last year recipients got 2.8 percent, the report points out that the 2020 cost of living increase is ” in line with the historical increases seen over the last ten years.”
While the average military retirement check for an E-7 with 20 years of service will increase by $38 a month, and a 20-year O-5 will see a $72 monthly increase, retirees who joined up on or after August 1, 1986 and opted in for the Career Status Bonus (CSB/Redux retirement plan) will see their COLA increases reduced by 1 percent, so they will see a smaller increase in 2020.
The IRS, for its part, says that tax benefits unique to military service might be overlooked. Among them is the combat pay exclusion, which comes with a choice; including combat pay in earned income by a servicemember claiming the Earned Income Tax Credit could result in a lower amount of tax owed and thus a larger refund.
Additional particulars:
- Military also get extended deadlines for combat zones and contingency operations
- They can deduct overnight travel expenses (handy for reservists who must stay overnight away from home while serving)
- Tax deductibility of unreimbursed moving expenses for PCS (permanent change of station)
- Potential tax benefits on sale of a primary residence if all conditions are met
- The exclusion of dependent care assistance programs from servicemembers’ income
- A possible tax benefit on payments from a Qualified Tuition Program or Coverdell Education Savings Account that are not used for educational expenses for military academy attendees
The IRS will also provide free tax help to members of the military and their families.