M21-1 Manual  /  Part XIII, Subpart ii, Chapter 4, Section A

Certifications of Permanent and Total (P&T) Disability for Internal Revenue Service (IRS) Purposes

M21-1, Part XIII, Subpart ii, Chapter 4, Section A

Overview

In This Section

 This section contains the topic "Certificate of P&T Disability for IRS Purposes."

1. Certificate of P&T Disability for IRS Purposes

Introduction

 This topic contains information on certificates of P&T disability for IRS purposes, including
  • when a certificate of P&T disability is required for IRS purposes
  • process for certifying P&T disability
  • how to prepare the certificate of P&T disability, and
  • how to deny the request for a certificate of P&T disability.

Change Date

 May 14, 2015

XIII.ii.4.A.1.a. When a Certificate of P&T Disability Is Required for IRS Purposes

 Claimants of the Internal Revenue Service (IRS) Disability Income Exclusion are required to submit a certificate attesting to permanent and total (P&T) disability. Under an agreement with the IRS, the IRS will accept a Department of Veterans Affairs (VA) certification on VA Form 21-0172, Certification of Permanent and Total Disability, based solely on an existing rating of P&T disability in place of the required private physician’s statement, if the form is completed and signed by a member of the rating activity.

XIII.ii.4.A.1.b. Process for Certifying P&T Disability

 The table below describes the stages in the process of certifying P&T disability.
StageDescription
1 VA refers requests for certification of P&T disability for income tax purposes to the rating activity with the claims folder.
2 The rating activity determines if the Veteran was rated as having any of the following during the year for which certification is requested
  • a combined service-connected evaluation of 100 percent (other than rating schedule cases under 38 CFR 4.28, 38 CFR 4.29, or 38 CFR 4.30)
  • a total evaluation on the basis of individual unemployability, or
  • a P&T evaluation for disability pension purposes.
Note: A pending future examination has no significance for purposes of this certification.

XIII.ii.4.A.1.c. How to Prepare the Certificate of P&T Disability

 The table below describes how to prepare and send a certificate of P&T disability after VA has determined that it can issue the certificate.
StageWho Is ResponsibleDescription
1 rating activity Completes VA Form 21-0172 to indicate the following:
  • the earliest date during the calendar year for which certification is requested and for which the rating decision establishes the total evaluation
  • the Veteran’s full name
  • the Veteran’s Social Security number
  • the status of the case as either a compensation or pension case (check the appropriate CFR reference)
  • whether or not the total disability was based in whole or in part on the loss or loss of use of a limb.
2 rating activity Dates and signs the certificate.
3 authorization activity Sends the certificate to the Veteran. Notes:
  • A cover letter is not needed.
  • Annotate the request to show the date the certificate was mailed to the Veteran.
  • If the claims folder is an electronic claims folder (eFolder), add an annotation in the Veterans Benefits Management System (VBMS) in the SUBJECT field under DOCUMENT PROPERTIES of the request document.

XIII.ii.4.A.1.d. How to Deny the Request for a Certificate of P&T Disability

 The table below describes the process for denying a request for a certificate of P&T disability if there is no current rating establishing the existence of total disability.
StageDescription
1 The rating activity
  • annotates the request in the following manner
    • No current rating, or
    • Total disability not shown by rating
  • initials and dates the request, and
  • refers the request to the authorization activity.
Important: If the claims folder is an eFolder, add the annotation in VBMS in the SUBJECT field under DOCUMENT PROPERTIES of the request document.
2 The authorization activity advises the Veteran as follows: VA may issue a certification of disability for income tax purposes only when the Veteran’s claims record establishes that he or she was rated as having a permanent, total disability for compensation or pension purposes during the year for which certification is claimed. As you were not rated totally disabled during that year, we cannot furnish a certification.
Note: Do not furnish notice of procedural and decision review rights with the letter advising that no certification will be issued. Certification is contingent on evaluation of disability, an issue for which notification of decision review rights has already been furnished.

Source: VA M21-1 Adjudication Procedures Manual, M21-1, Part XIII, Subpart ii, Chapter 4, Section A (U.S. government work, reproduced for reference). Browse all sections →