SSDI and Retirement

AV8R

PEB Forum Regular Member
I was officially retired Sunday the 25th. Little did I know that the Army holds your final pay for up to 30 days after you retire before you get that last AD paycheck. Anyway - that's not my concern.

My concern is taxes. I was given a sizable amount from Soc Security, which included back pay for disability. My kids also received back pay as well.

My question is that monthly SSDI payments are not taxable - thus is this back payment taxable? I have called the IRS to try and get an answer - but staying on the line waiting for the next available operator for 45 minutes to 1 hour - wasn't happening.

With my wife's meager teacher salary, and mine, we are still under the 28th percentile for taxes, but if you add this SSDI back payment (of which they broke it into 2007 and 2008 payments (although I received just one check) - it throws us into that 28th percentile.

I haven't touched the money - so when I get slammed for taxes, basically that money will be for our taxes - which I don't believe was/is the instention of giving wounded warriors SSDI and/or SSDI retro pay.

Thanks all
Andy
 
Welcome aboard,

I'm no tax expert, but if a payment is none taxable, it in itself is none taxable when paid in the rears.
 
av8r,

if you don't mind me asking, how long did the SS take from beginning to end. i initially applied to SS around 2007. i was denyed and now i am in the appeal process. it's been very slow and i'm really hoping that this get cleared up before my MEB gets done. thanks!!!
 
From the time I initiated the claim (Nov 07) until I received a check was August - so about 10 months - and I was told that was quick.
 
Just FYI - the SSA does have an expedited program for disabled service members, but like it is with most agencies, you have to educate them on their own programs! I pushed it hard and from filing date to first check, it was less than 5 months.

CSM
 
CSM, you are absolutely correct. I kept having to provide info at the next higher level than my local office - regarding why I was still receiving my regular duty pay. But even with the pushing from my end - I still ran into problems. For instance, the date isn't important, but my case manager called to let me know that my claim had been processed and I would be receiving $$ in the check within 5 days. I was pretty happy with that. However, the 5 days came and went and then I got a call from the SSA in DC, letting me know that my case had been picked for a "random" review.

I checked with some of the junior soldiers and senior ones in the WTU and it seems that all of ours were "randomly" picked for review. It added another month to the process.

And folks have to beware that depending on how much you get, you could be thrust into the next higher tax bracket, and have to pay significant taxes back to uncle suger. I just finished and I was lumped into the next bracket - but I was prepared, because when my SSA check hit, I stuck it in my DO NOT TOUCH account - so even though I had a hellish tax payment 10K +, the money came out of my SSA check. So no harm no foul.
 
Good point about the taxes, Andy. When you start to receive benefits, it can become very confusing with the tax and offset situations. I am currently getting three - VA, SSA, and FERS (civil service) disabilities. I start my MEB/PEB process tomorrow, so that will be a fourth retirement, and then I will have to go through the CRSC process. There is such a combination of offsets and tax implications that I may very well never figure it all out!

But I look at the bright side, despite the injuries and associated medical problems, I am drawing (soon) four retirements at age 49, and I have the honor of being an E-9 with 30 years service. Plus there are a bunch of smart guys here to help me figure it all out.

Steve
 
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