Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Military Income

Medical Separation Pay

Topic Activity

Your Next Client

On November 1, 2013, Sergeant Robert Martin was medically separated from active duty military service. Robert was entitled to and received $12,000 in severance pay.

His 2013 Form W-2 showed after-taxes income of $8,640 ($12,000 minus withheld taxes of $3,360). Robert filed his 2013 tax return in March 2014 and received a $567 refund.

Beginning in 2014, Robert received a service pension in the amount of $1,000 per month.

In August 2014, Robert received his VA determination letter, which showed he was entitled to a disability pension of 80% from the date of his discharge.

Does Robert need to file Form 1040X, Amended U.S. Individual Income Tax Return?

Sergeant Martin.