Local News

Veterans will get money back after 25-year computer glitch

Posted July 16, 2018 3:53 p.m. EDT
Updated July 16, 2018 5:29 p.m. EDT

The government owes thousands of veterans a tax refund due to a mistake dating back to the early 90s.

As a part of the Combat-Injured Veterans Tax Fairness Act of 2016, certain veterans can now receive up thousands of dollars in refunds.

In 1991, because of a computer glitch, thousands of non-taxable disability severance payments were subject to tax, a Defense Department official told CBS MoneyWatch.


The National Veterans Legal Services Program, a national advocacy group, originally caught the mistake.The Department of Defense is now in the process of sending out letters to more than 130,000 veterans who received disability charges and severance payments from the Defense Department between January 1991 and 2016.

Form 1040. Screenshot from the Department of Treasury Internal Revenue Service.

Veterans who are affected by this act are encouraged to complete Form 1040X and follow the instructions carefully. If a veteran is looking for a more simplified method to claim a refund and may not have all the information Form 1040X requires, they can "claim a standard refund based on the calendar year." For more details on how to fill out the Form 1040X document, go to the Official Blog of the U.S. Department of Veterans Affairs.

Veterans can also contact the IRS directly at 1-800-829-1040.