Paying Taxes Twice on Military Benefits?
Due to a confusing and arguably unfair provision in Federal Law, military spouses may be paying taxes twice on military benefits. There are an estimated 57,000 military spouses who may be affected by this Federal provision. These are spouses who received Federal benefits as a result of their late spouse’s military service and have now remarried. After the military spouse passes away and the surviving spouse has begun to receive benefits, in the event that they remarry, the Federal Government can request the full amount of the government benefits to be repaid. If the surviving spouse does not cooperate and set up a repayment plan, the government can begin garnishing funds to be repaid. The problem is that when the surviving spouse received the benefits initially, they paid taxes on the benefits. When they repay the benefits to the government, they are required to pay the full amount back, so they are essentially paying taxes twice on benefits they will never have received.
If you have questions about this or any other tax issue, please call Florida Tax Attorney Mary E. King at (941) 906-7585.