Page 90 - Wages, Salaries and Other Earnings

Military and Government Disability Pensions

Certain military and government disability pensions aren’t taxable.

Pension based on years of
service

 If you receive a disability pension
based on years of service, in most
cases you must include it in your
income.
 However, if the pension qualifies for
the exclusion for a service-connected
disability (discussed earlier), don’t
include in income the part of your
pension that you would have
received if the pension had been
based on a percentage of disability.
 You must include the rest of your
pension in your income.