Combat-injured veterans will soon receive notification about money they are owed on improperly taxed benefits.

On Dec. 16, President Obama signed the Combat-Injured Veterans Tax Fairness Act (P.L. 114-292), a law allowing combat-injured veterans the opportunity to reclaim a wrongly-taxed portion of their disability severance payment.

The new law requires the Department of Defense to identify and contact veterans medically separated from military service due to combat-related injuries that were issued severance payments after January 17, 1991, and withheld amounts for tax purposes.

The Department of Defense will provide affected veterans with a notice of the amount of improperly withheld severance payments, along with instructions for filing amended tax returns to recover that amount. Veterans will have up to one year following notification from the Department of Defense to file an IRS claim for a credit.

Senators John Boozman and Mark Warner introduced bi-partisan legislation to the Senate in March 2016, and Rep. David Rouzer sponsored the related bill in the House.

“I’m pleased that the Senate passed this critical legislation to right a wrong for our veterans who were unfairly penalized for injuries they sustained while in service to our country. This will ensure that our nation’s wounded receive the benefits they earned,” said Boozman, a member of the Senate Veterans Affairs Committee, in a release announcing the bill’s passage.

Warner was also quoted in the release, stating, “It is unbelievable that Congress needed to act to clear up this issue. Severance pay for service members who suffered combat-related injuries should not be taxed under any circumstance.”

While there is no action required from the Department of Veterans Affairs or DAV National Service Officers, it is important impacted veterans are made aware of the law and its implications for them.

“Passage of the Combat-Injured Veterans Tax Fairness Act means the men and women who served will be receiving the full benefits they earned,” said DAV Washington Headquarters Executive Director Garry Augustine. “The bipartisan support that enabled this legislation’s passage before the final days of the 114th Congress tells veterans that their service and sacrifice transcends political divides.”