Can the federal government double tax my drill pay debt?

SPC(P) Brandon Jenkins — Wed, 06 Jan 2021 08:31:15 -0500

Clarification: I receive a VA disability compensation while I am also a TPU reservist, which prevents me from drawing income from both sources simultaneously. I have elected to give up drill pay in favor of my higher paying disability pay. Here is the problem: drill pay is taxable, so when Uncle Sam comes to collect, will he be taking back my gross drill pay, or my net drill pay?

Response by Wayne Soares made Jan 6 at 2021 8:57 PM

Wayne Soares — Wed, 06 Jan 2021 20:57:48 -0500

Thanks for the question Brandon

Response by LTC Private RallyPoint Member made Jan 6 at 2021 9:41 PM

LTC Private RallyPoint Member — Wed, 06 Jan 2021 21:41:06 -0500

You are not doing this right. You should collect drill pay and inform the VA of how many drill periods you do a year. They will back out your disability pay for only those days!

Response by MAJ Ken Landgren made Jan 6 at 2021 10:00 PM

MAJ Ken Landgren — Wed, 06 Jan 2021 22:00:48 -0500

They won't tax you on income you don't receive.

Response by CPT Lawrence Cable made Jan 6 at 2021 11:46 PM

CPT Lawrence Cable — Wed, 06 Jan 2021 23:46:02 -0500

Why would your drill pay be less than your VA payment, you shouldn't be able to enlist with 100 percent disability? It is normally to your advantage to take the Drill Pay and forgo the VA payment for the days you drill. If you do nothing, the VA will just deduct the overpayments for those days from you first couple of months payment until the overpayment is met.

Response by MAJ Ken Landgren made Jan 7 at 2021 10:06 PM

MAJ Ken Landgren — Thu, 07 Jan 2021 22:06:19 -0500

I ❤️ tax season. I always get about $7,000 back :) What is even better is my wife is a procrastinator so we have not done this years taxes yet, so I am looking at $14,000 in a few months.