Disability
Any retirement pay that is connected to a military disability is not taxed. As part of the Military Authorization Act, Congress began ''concurrent receipt'' for disabled veterans, in 2003. The Military Authorization Act allows disabled military retirees to draw non-taxable disability along with their taxable retirement pay. Full concurrent receipt will phase in for many more years depending on the percentage of disability.
SBP (Survivor Benefit Plan)
SBP stands for 'Survivor Benefit Plan.” The purpose of this plan is to take care of military dependants after a military member dies. A military retiree's pay stops when he passes away, which can leave a dependent without an income. To prevent this from happening, a retiree can pay into the survivor benefit plan every month. The spouse can draw a certain percentage from the retirement pay for life. The income is taxable; however, the contribution is not taxable.
CRSC (Combat-Related Special Compensation)
CRSC is 'Combat-Related Special Compensation.' Further tax exclusions are also made for retirees who have disabilities related to combat. For example, a military career employee who received a Purple Heart would most likely receive this.
State Laws for Retirement Pay
The states that do not presently have income tax are: South Dakota, Texas, Alaska, Wyoming, Florida, Nevada, and Washington. New Hampshire and Tennessee only tax dividends and interest. All of the other states do impose tax on income, but there are some states that will exclude part of the income for disabled veterans.
To find out further information about military job retirement payments, search online for military job and/or military career opportunities today.
