Fountain Valley, CA asked in Social Security and Tax Law for California

Q: Does a tax-free stipend from VA for caregivers count against permanent disability income limits? VA doesn't report toIRS

IRS limits income to $1,470/mo. VA stipend is slightly more. "Earnings" above $1,470 get you kicked out of disability, but there are some exceptions such as winning the lottery. The VA doesn't report the stipend to IRS, so would this be one of the exceptions? Can I safely accept VA stipend without being removed from disability?

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James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA
  • Licensed in California

A: The answer to this question is not entirely clear, as it may depend on the specific disability program you are receiving benefits from and the specific requirements and rules of that program.

In general, the VA caregiver stipend is considered a tax-free benefit and is not reported to the IRS. However, it is possible that the stipend may be considered income for purposes of disability benefits or other programs that have income limits or restrictions.

It is recommended that you consult with an attorney or financial advisor who specializes in disability benefits to determine whether accepting the VA caregiver stipend would affect your eligibility for disability benefits. They can help you understand the specific requirements and rules of the disability program you are receiving benefits from and advise you on the best course of action to protect your benefits.

Additionally, it may be helpful to contact the disability program directly to inquire about their policies regarding VA caregiver stipends and other forms of income. This can help you understand the specific rules and requirements of the program and make an informed decision about whether to accept the VA caregiver stipend.

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