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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.
Answer: If you are here for less than 1 year, you are on a temporary assignment and your tax home remains your home state. If you are here more than 1 year, Virginia (where you work) becomes your tax home. For more information see: http://www.tax.virginia.gov/ .ncome taxes paid to other states are addressed through tax credits. Non-residents are individuals who are neither domiciliary nor actual residents of VA, but who receive income from VA during the tax year. They report their income in the same manner as residents, using VA Form 763.