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Eligibility | Winning My Case | Getting Paid by the Government | Earnings from Other Employment | Getting the Doctor on Your Side |
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QUESTION: Are disability retirement payments taxable?

ANSWER: Yes. Disability retirement payments are normally taxable as ordinary income. There are, however, some exceptions. For instance, persons who, in addition to meeting OPM's standard for disability retirement, are totally and permanently disabled for any gainful employment may be eligible for a special tax credit. Similarly, in certain circumstances and in certain states, persons may not have to pay state income tax on their federal annuity. Because the rules are complex and can have significant monetary consequences, you should consult a tax expert.


Additional FAQ'S


How sick or injured do I have to be in order to collect disability retirement?

How long must the disability be likely to last before I am eligible for disability retirement?

How long do I have to work for the government in order to be eligible for disability retirement?

Will a pre-existing disease or injury prevent me from collecting disability retirement?

Can I be denied disability retirement if I refuse evaluation or treatment which might reasonably ameliorate the medical condition causing the disability?

Do I need to have a job- related disease or injury in order to qualify for disability retirement?

What's the biggest difference between disability retirement and workers' compensation?

If I'm eligible for both disability retirement and workers' compensation, can I collect from both?

Which diseases and injuries qualify for disability retirement?

Is there a time limit on applying for disability retirement?

If I am fired from my government job, am I still eligible for disability retirement?

Is it possible to be fired as the result of sickness or injury and yet not qualify for disability retirement?

If I withdraw all of the money from my retirement fund after separation from government service, am I still eligible for disability retirement?

Who decides if I have a right to collect disability retirement?

If OPM denies my disability retirement application, will they give me another chance to prove my case to them, without having to appeal to the MSPB?

How valuable is the reconsideration stage in winning disability retirement?

What's the key to winning on reconsideration?

What are some of the things my lawyer might do to win on reconsideration?

Does OPM ever deny applicants the right to reconsideration? What do I do if that happens to me?

If I retain an attorney and win disability retirement before the MSPB, will I be reimbursed for attorney's fees?

Can my agency influence whether or not I get disability retirement?

What is the "Supervisor's Statement", and how important is it?

What is "accommodation," and how is it related to disability retirement? What about "reassignment?"

If I refuse to accept an accommodation or reassignment, will I lose my right to disability retirement?

What are the specific questions that OPM will ask me?

Do I have a right to keep the nature of my medical condition confidential from my agency? From OPM?

If I am denied disability retirement, can I ask for it again at a later time?

Winning My Case  

Will I need a lawyer to win disability retirement?

Which is more important in getting disability retirement, the nature of my disease or injury, or the symptoms from which I suffer?

How do I prove that I am disabled?

How do I get the government to award me retirement if I can't prove that I have disabling symptoms?

Can I really expect OPM to take seriously my claims of disabling symptoms when those symptoms are subjective?

What can I do to best assure that OPM takes my claim seriously?

What types of disability retirement cases have required legal assistance to win?

Getting Paid by the Government  

Will the amount I collect be related to the degree of my disability?

How much will I collect each month on disability retirement?

How long will I be paid that monthly annuity?

Can my disability retirement entitle me to additional payment (for nursing services, wheelchairs, etc.)?

If I've exhausted all of my sick and annual leave, can I go on leave without pay (LWOP) pending approval of my disability retirement?

If the agency won't grant LWOP, can I quit and still apply for disability retirement?

If I have sick leave left, should I exhaust it before I go on disability retirement? What about annual leave?

How long will it take to prepare my application for submission to OPM, and how long thereafter can I expect to wait until OPM approves my application? Also, how long will it be before I get any money?

What determines the date from which the monthly annuity begins?

Are disability retirement payments taxable?

Are legal fees incurred in petitioning for disability retirement tax deductible?

Can I continue to carry my government life and health insurance?

Earnings from Other Employment  

Can I work in another job after I retire from my government job on disability?

Is there an earnings limitation in that other job?

If I lose my disability annuity by earning too much, can I ever get it back?

Will OPM check up on me to see if I am still disabled or if I have been restored to earning capacity? If so, how, and how often?

Getting the Doctor on Your Side  

How will my doctor react when I ask for help in getting disability retirement?

What if my physician refuses to assist in my disability retirement application?


1995 - 2016 Harvey Friedman, all rights reserved.