I've been told that my Form 1099-R is wrong and that I should file an amended tax return to get a refund because my pension income is actually not taxable. Is that right?
Under normal circumstances, the Form 1099-R issued to the veteran by the Defense Finance and Accounting Services correctly reflects the taxable portion of compensation received.
The Department of Veterans Affairs just sent me a determination letter that increased my disability percentage from 30% to 50%, retroactive to a prior tax year. What should I do?
Because the redetermination is retroactive, your previously taxable pension income can now be reduced by the adjustment. You may be able to file amended returns, Forms 1040X, for the prior tax years.
Special statute of limitations. In most cases, under the statute of limitations a claim for credit or refund must be filed within 3 years from the time a return was filed. However, if you receive a retroactive service connected disability rating determination, the statute of limitations is extended by a 1 year period beginning on the date of the determination. This 1 year extended period applies to claims for credit or refund does not apply to any tax year that began more than 5 years before the date of the determination.
Veterans who have questions on filing claims for refund and filing of amended returns are encouraged to seek assistance from a competent tax professional.