Congressman Denny Rehberg

WASHINGTON, DC - Montana’s Congressman, Denny Rehberg, today applauded an Internal Revenue Service (IRS) decision which determined payments under the Department of Veteran Affairs (VA) Compensated Work Therapy (CTW) program are no longer taxable and that disabled veterans who paid tax these benefits in the past three years can now claim refunds.
“Many veterans have suffered permanent disabilities fighting for our country,” said Rehberg, a member of the House Financial Services Appropriations Subcommittee which oversees and funds the IRS. “That’s why I’ll continue to do everything I can to provide them with the healthcare they deserve. By taxing these services, the federal government was wrongly trying to skim a little something off the top by taking money out of the pocket of Montana’s vets. I’m glad the IRS has decided to overturn this policy.”

The CWT program provides assistance to veterans unable to work and support themselves. Under the new program, disabled veterans who paid tax on these benefits in tax-years 2004, 2005 or 2006 can claim a refund by filing an amended return. According to the VA, more than 19,000 veterans received CWT in 2006.

Earlier this year, U.S. Tax Court also issued a ruling that CWT payments are tax-free veterans’ benefits.