A & A and taxes

[Deb]

This may be a unique situation but I'm going to throw it out there to see if anyone else has had this experience.

Like many of the folks who have posted I applied for the A&A pension for my mother when she moved into assisted living (at the beginning of 2007) and waited for over a year before we actually received any money. After having to contact one of my senators, I finally got the benefit (retroactive and all) in March of 2008. 

My question is about a tax wrinkle: when we filed her 2007 tax return last year she had not yet received a dime from the VA, so I counted 100% of her assisted living rent as a medical deduction.  A month later we got the retroactive benefit.  It didn't occur to me that I should have filed an amended return--at that point my mother was in hospice care and would pass away in April.  So now I'm faced with having to deal with some tax fallout.

Normally the pension is not taxed but because I "double-dipped"--e.g. also took those expenses as a medical deduction--I'm understanding that I must treat the retroactive benefit as a "recovery" (like an insurance reimbursement, for example) and pay income tax on it.

Has anyone been in this situation? 

Thanks,
Deb P.

[vetadmin]

Deb,

Not being an accountant, this would beg the question since the VA benefit is NOT taxable and is NOT a reimbursement of medical expenses, why should it be treated as such?

[mcrews]

Deb is correct.
The VA does not pay for or reimburese for Medical expenses.
It's a "disability pension". And is not income.

Mark jOHN Crews