For more than two decades, the disability severance payments of combat-injured veterans have been improperly taxed. As a proud and active supporter of our military men and women who risk their lives for our freedom, Liberty Tax® will file amended returns of qualified disabled vets for free so they can get paid back the money they deserve.

So how did all this happen in the first place? According to federal law, one-time lump sum disability severance payments to veterans who suffered injuries in combat and were separated from the military were not supposed to be taxed at all. But for more than two decades, taxes were taken out because of limitations in the Department of Defense (DOD) automated payment system. The computerized system didn’t have the option of withholding zero taxes.

Fortunately, this mistake has been corrected by passage of the Combat-Injured Veterans Tax Fairness Act, a new federal law that guarantees these severance payments won’t ever be taxed again. Now qualifying disabled veterans from as far back as 1991 will get paid back every penny that was incorrectly withheld. To do so, a Form 1040X Amended U.S. Individual Income Tax Return must be filed, and Liberty Tax® will file it for qualifying veterans for free.

Form 1040X

“At Liberty Tax®, we don’t want to see anyone pay more in taxes than they should, but it is particularly distressing to find out that for years the men and women who have made such major sacrifices for our country have been improperly taxed on disability payments,” said CEO Ed Brunot, a Gulf War veteran. “Fortunately, our legislators have stepped in to right this wrong, and we couldn’t be more pleased to assist in this effort.”

The DOD is notifying by letter more than 130,000 combat-injured veterans that they may be eligible for this federal tax refund. But qualified vets will only have one year after the DOD provides veterans notice of the amount improperly withheld to claim their refund by filing the 1040X. Which is why we recommend that disabled veterans, once they download their free coupon and receive the DOD Fairness Act letter, come right away to a local Liberty Tax® office nearby so we can file the 1040X, at no charge, to help them get paid back their money as soon as possible.

Being headquartered in a major military region and a proud supporter of the USO, we understand the challenges members of the military face when it comes to deployments, combat zone exclusions, and other complexities of the tax filing process. We also know that taxes are the last thing they need to worry about while serving our country. That is why our professional tax preparers are trained to help veterans and active duty military members file their most accurate return.

Liberty Tax® honors our troops and their families and thanks them for their service. To show our appreciation, all season long we offer a 100% accuracy guarantee, a free double-check of tax returns prepared by a competitor, and year-round support to serve our military’s unique scheduling needs.


For more information about this special promotion, contact Liberty Tax® directly at 1-877-753-1095, or visit a conveniently located Liberty Tax® office near you. For real-time updates and more veterans news, follow Liberty Tax® on Facebook and Twitter.