• July 24, 2018
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The Defense Department has identified many veterans who may be eligible for a refund on the taxes paid on their disability severance payment. Most veterans who received a one-time lump-sum disability severance payment, when they separated from their military service, will receive a letter from the Department of Defense. If you have already received the letter, you would know it comes with detailed information on how to file for the refund. To help get you up to date, this blog will give you some information on the form you need to fill and its deadlines. Read on.

How Much to Claim?

Eligible veterans can claim a standard refund amount based on the calendar year, which is an individual’s tax year during which they received the severance payment. You have to explicitly mention “Disability Severance Payment” on line 15 of Form 1040X. On lines 15 and 22, you need to choose the standard refund amount, with the options being:

  • $1,750 for tax years 1991 to 2005
  • $2,400 for tax years 2006 to 2010
  • $3,200 for tax years 2011 to 2016

Form to Fill

To claim a refund, veterans need to file Form 1040X. They also need to mention either “Veteran Disability Severance” or “St. Clair Claim” across the top of the form’s first page. All amended returns need to be filed on paper, so you will have to mail the Form 1040X to the IRS office.


Applicants can file for a refund up to 1 year from the date of receiving a Defense Department notice; 3 years after the due date for filing the original return for the year the disability severance payment was made; or 2 years after the tax was paid for the year the disability severance payment was made.

Need Help Filing a Refund? Look No Further!

Whether you are looking to file a tax return or address an IRS tax debt related problem, the experienced tax attorneys at the Law Offices of Nick Nemeth can help.  Speak with one of our tax attorneys, today! To schedule an appointment, fill out our contact form or simply call (972) 426-2553.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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