Veterans Compensation exclusion

[Dean Faucher]

Compensated for losses.

"If there is no gain, there is no income." Supreme Court 1969

"If there is no gain, there is no income." [1] ...It [income] is not synonymous with receipts. Simply put, pay from a job is a 'wage,' and wages are not taxable. Congress has taxed income, not compensation." United States Supreme Court Conner v. United States. 303 F. Supp. 1187 (1969) pg. 1191: 47 C.J.S. Internal Revenue 98, Pg. 226. (Emphasis added
TAX CUTS AND JOBS ACT - CONGRESS DECEMBER 2017

• Exempt income is any income that isn't subject to federal tax.

 

[Dean Faucher]

Why would HPHA then use VA Pension as my income?
The VA gives out two - Compensation or Pension.
Congress says it is not income. IRS, US Dept of Veteran Affairs,
U.S. DEPT OF VETERANS AFFAIRS.
Quote: Compensation 101: What exactly is VA compensation?

• VA compensation is also an acknowledgement. An acknowledgement implies acceptance from the federal government that what happened to you in service can or may affect you after service. And that's a broad, vague statement. Thus, VA compensation makes up for the potential loss of civilian wages or civilian working time you'd miss as a result of, or for tending to (appointments, etc.), your injuries/medical conditions. It's basically the government saying, "Hey, thanks for your service. You sacrificed your health for America, so we accept that your reduced health may impact your ability to live as comfortably as you would had you not gotten hurt/sick."
• Lastly, VA compensation is not income. I'm going to say that again: VA compensation is not income. It is not a replacement or substitution for civilian employment, and it is not a military retirement. Except in uncommon situations, VA does not pay you to not find or hold civilian employment. Compensation makes up for; it doesn't replace.

VA pension is an income-based benefit offered to qualifying Veterans and their survivors. The amount of pension payable is based on the Veteran's or survivor's family income. VA may be able to deduct out-of-pocket medical expenses from income, including but not limited to amounts paid to nursing homes, assisted living facilities, and for in-home care. Additionally, if VA determines a Veteran or surviving spouse is housebound or requires the aid and attendance of another person, he or she may be entitled a higher rate of VA Pension.

 

[Disabled Vet]

So.... what the heck are you talking about. LOL

1. VA disability Compensation ( Considered NON income, NOT taxable either)
2. VA Pension ( Considered Income, Taxable and based off income)
3. SMC (Special Monthly Compensation) Considered NON income, NOT taxable)

Some programs will require you to report your VA disability compensation as income. I've had tax folks tell me that my VA disability has to be reported for federal income. It's not....

I know on my kids FAFSA forms my VA disability Compensation had to be reported. Just remember this.... the Federal gov doesn't always follow their own rules.

 

[army judge]

If a person needs tax advice, he/she would be wise to procure the services of a tax attorney or CPA.

 

[Dean Faucher]

Is VA Compensation Genuinely Ambiguous to VA Pension?
Compensation
NOUN

1. Something, typically money, awarded to someone as a recompense for loss, injury, or suffering.
   "seeking compensation for injuries suffered at work" ·
   recompense · repayment · payment · reimbursement · remuneration · requital · indemnification · indemnity · redress · satisfaction · damages · reparations · comp · guerdon · meed · solatium
2. Pension
   
   NOUN
   1. A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.

 

[Zigner]

Is VA Compensation Genuinely Ambiguous to VA Pension?
Compensation
NOUN

1. Something, typically money, awarded to someone as a recompense for loss, injury, or suffering.
   "seeking compensation for injuries suffered at work" ·
   recompense · repayment · payment · reimbursement · remuneration · requital · indemnification · indemnity · redress · satisfaction · damages · reparations · comp · guerdon · meed · solatium
2. Pension
   
   NOUN
   1. A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed during their working life.

The definition that matters is that of the agency(ies) involved, not some random, plagiarised web site.

 

[Tax Counsel]

Compensated for losses.

"If there is no gain, there is no income." Supreme Court 1969

"If there is no gain, there is no income." [1] ...It [income] is not synonymous with receipts. Simply put, pay from a job is a 'wage,' and wages are not taxable. Congress has taxed income, not compensation." United States Supreme Court Conner v. United States. 303 F. Supp. 1187 (1969) pg. 1191: 47 C.J.S. Internal Revenue 98, Pg. 226. (Emphasis added
TAX CUTS AND JOBS ACT - CONGRESS DECEMBER 2017

• Exempt income is any income that isn't subject to federal tax.

Whatever site you copied that from is very, very wrong. Wages and other compensation for personal services are taxable income. Indeed, Internal Revenue Code (IRC) section 61(a)(1) says this explicitly:

(a) General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:

(1)Compensation for services, including fees, commissions, fringe benefits, and similar items;
​

The federal courts have consistently held that wages are taxable income and no federal court has ever held that wages are not taxable income.

And again, more to the point of things, as I stated before, the tax treatment of your benefits has absolutely nothing to do with whether it is treated as income for the purposes of the HUD housing benefits. They are treated as income for that purpose, and it has nothing to do with HUD or the VA treating your VA benefits as a pension either.

Don't look to the tax law for help to your problem. It is irrelevant to your issue. You have to look at the statutes that set out the requirements for the benefits you are seeking. Those statutes are the only ones that matter here.

 

[Tax Counsel]

Just remember this.... the Federal gov doesn't always follow their own rules.

That's not the problem here. The rules are being followed. The issue is that Congress defines income differently for different purposes. Congress defined income differently for its income tax laws than it did for the housing benefits it created. And there is nothing illogical or illegal about that.