Is my military disability retirement taxable?

[Provis]

I finished the MEB process and was awarded 90% DOD. My retirement date is 17 July 2024. I start terminal leave 16 April. I am currently going through the Special Selection Board for LTC. The board is scheduled to happen the first week of May 2024. Do I need to let HRC know that I have a retirement date before being selected by the SSB?

Are you trying to retire as a LTC? Since the calculation for high 3 uses last 36 months of base pay there would be no additional compensation from being promoted. However, if your are on the promotion list but not yet promoted then on the last day they will promote you so that you can say you retired as a LTC instead of a Major.

 

[Provis]

I finished the MEB process and was awarded 90% DOD. My retirement date is 17 July 2024. I start terminal leave 16 April. I am currently going through the Special Selection Board for LTC. The board is scheduled to happen the first week of May 2024. Do I need to let HRC know that I have a retirement date before being selected by the SSB?

You got me thinking a bit. If you get on the promotion board while on terminal leave you would need to contact HRC after you find out that you are on the promotion list. They will need to amend your orders to show you as LTC on the last day you are on active duty. They would not know to change it to the last day before you retire since you have already out-processed and have your retirement orders and DD214.

 

[TortolliniShell]

I have the same question on tax for pay, my first RAS doesn't show any taxes. I haven't gotten an eRAS or monthly pay yet.
Also, if someone retires on the 26th of a month, does DFAS "count" that as part of your high 36 for pay? I ran the numbers and it looks like DFAS didn't count my last month.

 

[RonG]

I have the same question on tax for pay, my first RAS doesn't show any taxes. I haven't gotten an eRAS or monthly pay yet.
Also, if someone retires on the 26th of a month, does DFAS "count" that as part of your high 36 for pay? I ran the numbers and it looks like DFAS didn't count my last month.

Hello,

I provided the following in one of your other posts:

Hello,

The following financial regulation shows the computation of retirement pay:
https://comptroller.defense.gov/Portals/45/documents/fmr/Volume_07b.pdf#page6

If you have a disability retirement, in most cases you can divide the gross retired pay by the DoD disability percentage = contemporary average high three base pay.

It is my understanding that only full months are used in computing the high three (36 months). You mentioned you retired the 28th of a month.
Did you enter into a retired status that day OR was it your last day of active duty? If the month was February, which had 29 days this year, retiring on the 28th was an incomplete month.

Ron
Note: two different retirement dates were stated: 26th and 28th.

Reference: https://uscode.house.gov/statutes/pl/99/348.pdf
Each full month in addition to the years, will be counted as 1/12 of a year in the computation of regular retired pay. There was no provision for including a partial month that I saw.

10 U.S. Code § 1405 - Years of service​

Edited to add 2:
(a)In General.—For the purposes of the computation of the years of service of a member of the armed forces under a provision of this title providing for such computation to be made under this section, the years of service of the member are computed by adding—
(1)
his years of active service;
(2)
the years of service, not included in clause (1), with which he was entitled to be credited on May 31, 1958, in computing his basic pay; and
(3)
the years of service, not included in clause (1) or (2), with which he would be entitled to be credited under section 12733 of this title if he were entitled to retired pay under section 12731 of this title.
(b)Fractional Years of Service.—In determining a member’s years of service under subsection (a)—
(1)
each full month of service that is in addition to the number of full years of service creditable to the member shall be credited as 1⁄12 of a year; and
(2)
any remaining fractional part of a month shall be disregarded.







cc: @Provis @chaplaincharlie

 

[bklyng03]

You got me thinking a bit. If you get on the promotion board while on terminal leave you would need to contact HRC after you find out that you are on the promotion list. They will need to amend your orders to show you as LTC on the last day you are on active duty. They would not know to change it to the last day before you retire since you have already out-processed and have your retirement orders and DD214.

I contacted HRC retirement and separations, but they told me to get in contact with the Physical Disability Agency through my PEBLO since this is a medical disability retirement. So, I sent it to the PEBLO and she is forwarding it to the PDA. I am on the LTC SSB for 2023, so it would go back a year if the board selects me.

 

[bklyng03]

You got me thinking a bit. If you get on the promotion board while on terminal leave you would need to contact HRC after you find out that you are on the promotion list. They will need to amend your orders to show you as LTC on the last day you are on active duty. They would not know to change it to the last day before you retire since you have already out-processed and have your retirement orders and DD214.

I let HRC, Separations and Retirement, know about the SSB for LTC and they referred me to go to the Physical Disability Agency through my Peblo. After I gave it to my Peblo to push forward, my retirement date changed to August 2024. HRC said I would likely go through the SSB in this month or beginning of May. Quick back story: I was separated in 2014 and brought back to active duty through the ABCMR in 2022. My ABCMR gave me back pay, promotion to Major from 2011 and when going to the LTC board that the board could not look negatively on me for lack of evaluations. Since ILE is not a requirement and I have my MBA and Juris Doctorate, I believe I have a great chance.