disability pension

[Kea]

Client started receiving military disability pension in September 2009, but it was retro-active to December 2008. I believe this counts as a government pension. But with a real start date of September 2009 & an effective start date of December 2008, would he qualify for the $250 and should he have received it?

I wanted to check here before asking him. If it was included in the retro-pay, he may not know he got it. I'm tempted to fill out the form with a Yes on the pension and $250 in the amount. If it rejects then claim the $250 for him.

Any suggestions?

Thanks

[TAXBILLY]

Client started receiving military disability pension in September 2009, but it was retro-active to December 2008. I believe this counts as a government pension. But with a real start date of September 2009 & an effective start date of December 2008, would he qualify for the $250 and should he have received it?

I wanted to check here before asking him. If it was included in the retro-pay, he may not know he got it. I'm tempted to fill out the form with a Yes on the pension and $250 in the amount. If it rejects then claim the $250 for him.

Any suggestions?

Thanks

Is this person in the social security system?

taxbilly

[Kea]

No, he didn't mention an SS disability pension, but I can verify that with him. He's in his 20s and has a war injury. I know it's a military disability pension - so I'm thinking it's a VA pension. But I'm not real sure about that.

Thanks

[TAXBILLY]

Is it a taxable pension and if it is then maybe he received the $250 from the VA. I don't know their cutoff date or whether it was similar to Social Security.

taxbilly

[Kea]

I haven't seen anything about cut-off dates either, which is why I posted. No, it's not taxable.

[Gail in Virginia]

If the taxpayer paid into social security while he was in the military, then I don't think this pension has anything to do with the stimulus payment. He would only be entitled to the Making Work Pay credit if he or his spouse had earned income. The $250 only comes into play if they are drawing social security or a government pension that totally replaces social security because they did not pay into social security. At least, that is how I understand it. If someone with more knowledge wants to speak up, this would be a good time.

[TAXBILLY]

If the taxpayer paid into social security while he was in the military, then I don't think this pension has anything to do with the stimulus payment. He would only be entitled to the Making Work Pay credit if he or his spouse had earned income. The $250 only comes into play if they are drawing social security or a government pension that totally replaces social security because they did not pay into social security. At least, that is how I understand it. If someone with more knowledge wants to speak up, this would be a good time.

You are correct, Gail.

taxbilly

[Kea]

Thanks so much. I'll check "No" on the govt pension and $0 received -- or just delete Sch M altogether. No earned income for the year due to the disability.

[TAXBILLY]

Looks like that's the way to go.

taxbilly