A policy shift by the Internal Revenue Service (IRS) will help reduce the tax burden on retired military service members.
The effort to create this policy was spearheaded by Rep. Juan Vargas (D-CA).
“Many of our veterans are struggling to make ends meet and depend on their military retiree payments to survive,” Vargas said. “Levies placed on military retiree payments are creating hardship for our veterans. I’m pleased to know that the IRS has chosen to reverse its policy, which will ease the burden low-income veterans are facing.”
The IRS agreed to apply a low-income filter to military retiree payments subject to the Federal Payment Levy Program. Previously, military personnel were not included in this low-income filter. This change will help low-income veterans by excluding their military retiree payments from IRS levies.
In 2013, 93,540 retired service members had delinquent accounts with the IRS. Many retired service members do not have a steady income or cannot find full-time employment. Placing levies on military retiree payments places an additional burden on these veterans.
This new low-income filter will apply to all military retiree payments beginning in the fall of 2018. In the meantime, if a levy creates a hardship, the IRS will work with the individual taxpayer to review the levy, and in some cases, release it.