VA Disability + Retirement Income Calculator

Before 2004, military retirees who received VA disability compensation had their retirement pay reduced dollar-for-dollar by the VA disability amount. The Concurrent Retirement and Disability Pay (CRDP) program changed this for qualifying retirees.

CRDP eligibility requires:

• 20 or more years of creditable service (or medical retirement with 20+ years)
• VA disability rating of 50% or higher

If you meet both requirements, you receive your full retirement pay plus your full VA disability compensation with no offset.

If your VA rating is below 50%, your retirement pay is reduced dollar-for-dollar by the VA disability amount. Your total income stays the same, but the VA portion is tax-free.

CRSC is a separate entitlement for retirees whose VA-rated disabilities were caused by combat, combat operations, hazardous duty, an instrumentality of war, or while engaged in armed conflict.

CRSC can help retirees who:

• Have a VA disability rating below 50% (and therefore do not qualify for CRDP)
• Medically retired with fewer than 20 years of service
• Would receive more under CRSC than under CRDP

CRSC restores some or all of the VA disability offset, and like VA disability compensation, CRSC payments are tax-free. You cannot receive both CRDP and CRSC — you receive whichever is more beneficial.

Note: This calculator does not calculate CRSC amounts, as eligibility requires a combat-related determination by your branch of service. Contact your service branch for CRSC applications.

VA disability compensation is completely exempt from federal and state income taxes. This is a significant financial benefit:

• A retiree receiving $2,000/month in taxable retirement pay and $1,500/month in tax-free VA disability keeps more after taxes than someone receiving $3,500/month in fully taxable retirement pay.
• For retirees with lower VA ratings (under 50%) subject to the offset, the offset effectively converts taxable retirement pay into tax-free VA disability pay, providing a modest tax advantage even though total income stays the same.

Yes. With 20+ years of service and a 50%+ VA rating, you qualify for CRDP and receive both in full. Under 50%, your retirement pay is reduced by the VA disability amount, but you still receive both — and the VA portion is tax-free.

CRDP allows qualifying military retirees (20+ years, 50%+ VA rating) to receive their full military retirement pay and full VA disability compensation simultaneously, without any offset or reduction.

Combat-Related Special Compensation (CRSC) restores some or all of the VA disability offset for retirees with combat-related disabilities. It is available even for those with less than 50% VA disability or who medically retired with fewer than 20 years. CRSC payments are tax-free.

No. VA disability compensation is completely tax-free at the federal and state level. Military retirement pay is taxable. This makes VA disability compensation especially valuable for retirees calculating their after-tax income.

If you have 20+ years of service but less than 50% VA disability, your retirement pay is reduced by the full amount of your VA disability compensation. Your total gross income remains the same, but since the VA portion is tax-free, you receive a small tax benefit compared to receiving only retirement pay.