VA BENEFITS (MAM) |
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Payments made to disabled or retired veterans or their legal dependents by the Department of Veteran Affairs.
Treatment: Unearned Income for the non-MAGI-related medical assistance groups. Excluded income for the MAGI-related medical assistance groups.
Exceptions:
When determining eligibility and allotment amount, exclude VA benefits payable to:
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children born with spina bifida (including adult children) of Vietnam veterans; or |
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individuals with covered birth defects, as defined by the VA, who are natural born children of female veterans who served in Vietnam from February 28, 1961 through May 7, 1975. |
See also VA Aid and Attendance Allowance, VA $90 Nursing Facility Pension, and Educational Income.
The following veterans’ benefits are non-taxable:
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Education, training, and subsistence allowances; |
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Disability compensation and pension payments for disabilities paid to veterans or their families; |
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Grants for homes designed for wheelchair living; |
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Grants for motor vehicles for veterans with limited use of their limbs; |
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Veterans’ insurance proceeds paid to veterans or their beneficiaries; |
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Interest on insurance dividends left on deposit with the VA; |
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Benefits under a dependent-care assistance program; |
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Death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001; |
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Payments made under the compensated work therapy program; and |
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Bonus payments by a state or political subdivision due to service in a combat zone. |
References: 42 CFR 435.603; IRS Publication 17, Your Federal Income Tax (For Individuals) [https://www.irs.gov/pub/irs-pdf/p17.pdf]