Repayment of Selective Separation Bonus

[ALINEDAWG]

Can anyone tell me how I can go about not having to repay a debt twice?  I was discharged under SSB "Selective Seperation Bonus" in OCT1993.  Received 34k and was taxed about 8.5K.  I just got my determination from the VA (80%) however, they say I have to repay the seperation pay I received in 1993 including the amount that was taxed before I can start receiving my VA compensation.  This just dosen't seem fair or wright.  I'm having to pay back an amount the Gov't (IRS) withheld from me. I've been fighting with them over the separation pay business.  I was separated under SSB not severance pay.  Might just be a play on words on my part but to me the two are separate and they are having me repay taxable money with non-taxable income including the taxed amount.  Any takers.  Bill

[veteranadvocate]

Response to this email was sent directly to the forum member since the question was not related to the Aid & Attendance benefit.

[SSB Taker]

You might want to consider this.  The IRS has rules in place that if you have to pay back your employer, you may be able to report you had to pay back the taxes and get a tax break.  I got a bonus and it was forfeited when I quit my job and the employer took back the bonus including the taxes paid.  I claimed the entire amount on my taxes and received the deduction the year the employer took it back.