Recoup withheld taxes from the IRS


Registered Member
I wanted to put this out there in case anyone has an answer. I was medically discharged from the Air Force in early April 2016 after 6 years. Since you go through your VA exams at the same time you separate I received my VA rating of 30% before I left Active Duty so I knew what was coming to me upon discharge. I received my disability severance pay of about $26K in late April and in July my VA disability started coming in and has been coming in monthly without any recoupment of my severance pay as it should.

I need to amend my 2016 tax return so that I can leave off the disability severance pay thus changing my income drastically. I also need my tax return to reflect accurately with the severance left off as I currently cannot qualify for financial aid because my "income was to high". I'm a single mom currently in nursing school surviving on GI bill housing and VA disability with 2 kids so even though I know this will be an almost 1 year process between the IRS taking their time in reviewing I still want to do it now before "life happens" and I never get around to it.

I have the St Clair reference letter from DFAS that I received in Jan 2017 stating I can recoup the tax withheld and have been on and off researching how since then. I understand that I need my VA award letter, 2016 W2, Separation orders but I get conflicting info on two things. Some say I need a corrected W2 from DFAS and some also say I need to have my severance pay amount on my DD214 (Mine simply states "Disability, severance pay, non combat (enhanced)" in box 28 which is where I'm guessing the amount could have been placed.

All that brings me to the three questions I am hoping one of you out there may have the answers to:

1) Were you able to get a corrected W2 from DFAS? If so how did you go about it because their phone tree just gave me the run around 4 times.
2) Does your DD214 have your severance pay dollar amount anywhere? If not what proof are you using to give the IRS the amount of severance you recieved.
3) Have any of you successfully recouped the taxes withheld from the IRS?

Thank you to anyone who answers!
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