Disability Income Tax Question Anyone Help
Q: In August of 1985 I was retired from my job with a service-conncted disability retirement. I was in a very confused state of mind at that time and wasn't aware of all the tax laws. My employer reported my income to the company that pays my monthly benefits as "Tax Status Unknown." Since that date, I have been filing and paying income taxes. The company sends me a 1099 form every year and I file a simple tax form. Well, I just found out a few days ago that everyone else who was retired from my place of employment with a "service-connected disability retirement" have never paid income taxes for the past ten years! I have been told I could send the IRS modified returns for the past three (3) years and reclaim the money I paid out and could be exempt from paying taxes in the future. Does anyone know of a specific law that deals with "service-connected disability" retirements? I have hired a CPA but so far she is having problems finding the exact law. I am in Maryland.
A: Question : In August of 1985 I was retired from my job with a service-conncted disability retirement. I was in a very confused state of mind at that time and wasn't aware of all the tax laws. My employer reported my income to the company that pays my monthly benefits as "Tax Status Unknown." Answer: That notice was a clue that your employer wasn't about to take a position on this one .