Filing Taxes - What Do I Need To Do? Published Feb. 4, 2009 Air Force Wounded Warriors -- This is the annual tax-filing season, and once again, Air Force Wounded Warriors are wondering, "what do I need to file my taxes?" This is a very common and understandable question since most AFW2 members will not receive any form of tax reporting statement from the Defense Finance and Accounting Service (DFAS), or the Veterans Administration (VA). Why not? Because most, if not all, of AFW2 retired pay and VA compensation is considered non-taxable. No 1099 or W-2 is issued, because no tax is withheld. For the majority of our AFW2 members, this is the first time they have received non-taxable income and may not understand their tax filing requirements. For those retirees whose AF retired pay is based on Length of Service (longevity), but receive a portion based on a combat-related disability, only that portion of their pay not based on disability is taxable. They will receive a 1099 from DFAS, but it should only show their taxable income amount that was reported to the IRS - not the portion based on their combat disability. If their retired pay account was corrected during the year, and they received a refund of taxes, they will not receive a 1099 from DFAS, and the refund will not be reported to the IRS. Income from the Veterans Administration is considered non-taxable and is not reported to the IRS. Combat-Related Special Compensation (CRSC) income is considered non-taxable and is not reported to the IRS. Concurrent Retirement Disability Pay (CRDP) is taxed as normal AF retired pay and will be reported to the IRS. (Only retirees with 20 or more years of service and at least a 50% VA disability rating will qualify to receive CRDP) Contact your nearest base's legal office or the IRS for more specific information.