[Hpn] Ruling on Compensated Work Therapy Retroactive Three Years

William C. Tinker wtinker@verizon.net
Mon, 07 Jan 2008 10:48:41 -0500


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Recent VA News Releases

To view and download VA news release, please visit the following
Internet address:
http://www.va.gov/opa/pressrel


Pay in Vets' Work Program Ruled Tax-Free

Ruling on Compensated Work Therapy Retroactive Three Years

WASHINGTON (January 7, 2008) -- Payments provided to veterans under two
specific programs of the Department of Veterans Affairs (VA) -- the
Compensated Work Therapy (CWT) and Incentive Therapy (IT) programs --
are no longer taxable, according to the Internal Revenue Service.
Veterans who paid tax on these benefits in the past three years can
claim refunds.

Recipients of CWT and IT payments no longer receive a Form 1099
(Miscellaneous Income) from VA.  Veterans who paid tax on these benefits
in tax years 2004, 2005 or 2006 can claim a refund by filing an amended
tax return using IRS Form 1040X.  Nearly 19,000 veterans received CWT
benefits last year, while 8,500 received IT benefits.

The IRS agreed with a U.S. Tax Court decision earlier in 2007 that CWT
payments are tax-free veterans benefits.  In so doing, the agency
reversed a 1965 ruling that these payments were taxable and required VA
to report payments as taxable income.

The CWT and IT programs provide assistance to veterans unable to work
and support themselves.  Under the CWT program, VA contracts with
private industry and the public sector for work by veterans, who learn
new job skills, strengthen successful work habits and regain a sense of
self-esteem and self-worth.  Veterans are compensated by VA for their
work and, in turn, improve their economic and social well-being.=20

Under the IT program, seriously disabled veterans receive payments for
providing services at about 70 VA medical centers.



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<DIV>Recent VA News Releases<BR><BR>To view and download VA news =
release, please=20
visit the following<BR>Internet address:<BR><A=20
href=3D"">http://www.va.gov/opa/pressrel</A><BR><BR><BR>Pay in Vets' =
Work Program=20
Ruled Tax-Free</DIV>
<DIV><BR>Ruling on Compensated Work Therapy Retroactive Three =
Years</DIV>
<DIV><BR>WASHINGTON (January 7, 2008) -- Payments provided to veterans =
under=20
two<BR>specific programs of the Department of Veterans Affairs (VA) --=20
the<BR>Compensated Work Therapy (CWT) and Incentive Therapy (IT) =
programs=20
--<BR>are no longer taxable, according to the Internal Revenue=20
Service.<BR>Veterans who paid tax on these benefits in the past three =
years=20
can<BR>claim refunds.<BR><BR>Recipients of CWT and IT payments no longer =
receive=20
a Form 1099<BR>(Miscellaneous Income) from VA.&nbsp; Veterans who paid =
tax on=20
these benefits<BR>in tax years 2004, 2005 or 2006 can claim a refund by =
filing=20
an amended<BR>tax return using IRS Form 1040X.&nbsp; Nearly 19,000 =
veterans=20
received CWT<BR>benefits last year, while 8,500 received IT =
benefits.<BR><BR>The=20
IRS agreed with a U.S. Tax Court decision earlier in 2007 that =
CWT<BR>payments=20
are tax-free veterans benefits.&nbsp; In so doing, the =
agency<BR>reversed a 1965=20
ruling that these payments were taxable and required VA<BR>to report =
payments as=20
taxable income.<BR><BR>The CWT and IT programs provide assistance to =
veterans=20
unable to work<BR>and support themselves.&nbsp; Under the CWT program, =
VA=20
contracts with<BR>private industry and the public sector for work by =
veterans,=20
who learn<BR>new job skills, strengthen successful work habits and =
regain a=20
sense of<BR>self-esteem and self-worth.&nbsp; Veterans are compensated =
by VA for=20
their<BR>work and, in turn, improve their economic and social =
well-being.=20
<BR><BR>Under the IT program, seriously disabled veterans receive =
payments=20
for<BR>providing services at about 70 VA medical=20
centers.<BR><BR><BR></DIV></BODY></HTML>

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