The refund window a retro award opens

Published September 2, 2026. The benefits-news items below were current as of that date. This is an archived issue of our weekly email — subscribe here to get new issues first.

Quiet week — and the tax rule most retirees have never heard of

No rate changes, no new DFAS rules, no CRSC policy moves this week. The next hard number arrives September 11, when BLS publishes the August CPI-W — the second of the three readings that set the 2027 COLA. The final figure comes in mid-October, and anything quoted as “the 2027 COLA” before then is a projection. (Source: BLS CPI release schedule.)

So here is a money item most retirees have never heard of. When VA grants a rating retroactively — the way most successful claims land — the retired pay you already paid income tax on for those back years may be recharacterized as dollars waived in exchange for tax-free VA compensation. Amended returns normally stop at three years. Federal tax law has a special rule for exactly this situation: 26 U.S.C. §6511(d)(8) keeps the refund window open until one year after the date of the VA determination, even when the standard three-year window has closed. (Source: 26 U.S.C. §6511(d)(8).)

The quiet variable in your check: dependent status

Dependent status is the quiet variable in both your VA check and any CRSC payment. At a combined rating of 30% or higher, VA pays additional compensation for a spouse, children, and dependent parents — and CRSC is paid using those same VA rate tables, so dependent status flows through to the CRSC number too.

Marriages, divorces, births, a child turning 18 (or 23 if still in school): each one changes the correct rate. Report late in one direction and you may leave months of higher payments unclaimed; report late in the other and an overpayment debt gets collected out of future checks. The form is VA Form 21-686c, filed online through va.gov. Boring paperwork that moves real dollars.

Letting buddy statements carry the packet

Statements have a place — they add context. But CRSC boards decide on official documentation: award citations and orders, service treatment records dated at the time of the injury, line-of-duty determinations, personnel records that put you at the event.

A packet built on three heartfelt statements and no records asks the board to take the file’s word for it, and boards routinely say no. Flip the order: build on official records first, then let statements fill the specific, narrow gaps the records leave. If a record doesn’t exist, the fix is usually requesting the right document — not writing another statement.