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VA disability compensation is nontaxable to the veteran or survivor and is not reported on any tax forms. The veteran will receive a report showing any adjustments due to cost-of-living adjustments (COLA) or other changes affecting the monthly benefit during the year.hus, for the 2012 tax year, the adjustment is $2,294 ($1,614 ($538 3) + $680 ($340 2)). (3) The adjustment is reported on the Other income line of Form 1040 as a negative number with the notation VA Disability Adjustment See Attachments included on the dotted line.
Claiming Dependents. If the disabled adult meets the criteria for you to claim her as a dependent, either as a qualifying child or qualifying relative, you must file your taxes with either Form 1040A or Form 1040. On either return, on line 6, column 1, report the person's name. In column 2, report the person's Social Security number. In column 3, report the person's relationship to you. Each dependent you claim reduces your taxable income by $3,950, as of the 2014 tax year. Records to Keep ...