Filing California Claims for Refund under the Combat-Injured Veterans Tax Fairness Act of 2016 March 2019 Tax News

The Combat-Injured Veterans Tax Fairness Act (CIVTFA) gives veterans who retired from the Armed Forces for medical reasons additional time to claim a federal tax refund if they had taxes improperly withheld from their severance pay.  Severance pay received for a combat-related injury may be excluded from gross income. Under the CIVTFA (see also IR-2018-148) the federal statute of limitations was extended to allow affected veterans time to file their claims for refund for previously taxed income.

It’s important to note that while California does not conform to the federal legislation establishing the extended statute of limitations (SOL), claims for refund may still be filed under California law. If the regular California SOL is still open, a claim for refund may be filed independent of the corresponding federal claim. However, if the California SOL has expired, the California claim for refund should not be filed until the IRS has allowed the corresponding federal claim. Generally, we allow two years[1] from the date of a federal change to file a claim for refund resulting from the federal change.

How to file a claim

To file a claim for refund with FTB, Veterans may submit a Schedule X with an amended Form 540, 540 2EZ, or Long or Short Form 540NR for tax years on or after 2017, Form 540X for tax years 2016 and before, or a letter claim. Amended returns or letter claims should include the following:

• A copy of the letter they received from the Defense Finance and Accounting Service (DFAS) or the Internal Revenue Service

• A copy of the IRS Form 1040X and substantiation indicating the IRS allowed the refund (determination letter, refund issues, etc.)

If we need additional information, we will contact you.

Where to send your claim

Taxpayers should send their claim for refunds and supporting documentation to:

State Of California Information Validation Sections MS 170 Franchise Tax Board Po Box 1565 Rancho Cordova Ca 95741-156

Mail

State Of California
Information Validation Sections MS 170
Franchise Tax Board
Po Box 1565
Rancho Cordova Ca 95741-156

References

[1] Revenue and Taxation Code section 19311.