P 312012Z AUG 18
FM DFAS CLEVELAND OH
TO AIG 4676
AIG 4678
BT
UNCLAS
FM DFAS CLEVELAND OH
TO AIG 4676
AIG 4678
SUBJ/TAX EXEMPT DISABILITY SEVERANCE PAY (DSP)//
MILITARY PAY ADVISORY 25/18//
REF/A/ DODFMR VOL 7A CHAPTER 35//
REF/B/ INTERGARTED DISABILITY EVALUATION SYSTEM//
1. REF A IS CURRENTLY BEING UPDATED TO REFLECT THE USE OF
THE VETERANS ADMINSTRATION (VA) PROPOSED DISABILITY RATING LETTER
WHICH IS MAINTAINED IN REF B AS A VALID DOCUMENT TO BE USED IN
DETERMINING THE TAXABILITY OF DISABILITY SEVERENCE PAY.
2. AS OF SEPTEMBER 1ST 2018 THE PROPER DOCUMENTATION NEEDED TO
DETERMINE TAX EXEMPT STATUS OF DSP WILL BE THE MEMBERS DD214,
SEPARATION ORDERS AND PROOF OF VA COMPENSATION BY EITHER THE
PROPOSED RATING IN REF B OR THE VA AWARD LEVEL.
3. PROCESSING OF DSP IS DONE THROUGH THE E5 TRANSACTIONS
WHICH HAS AN INDICATOR FOR TAXABLE "1" (DEFAULT) AND NONTAXABLE "2"
IF YOU DO NOT HAVE PRPOPER DOCUMENTATION AT TIME OF DISCHARGED
PROCESS E5 AS TAXABLE IF THE DOCUMENTATION IS RECEVED BY SEPARATION
OFFICE WITHIN 20 DAYS OF DISCHARGE SEPARATION COMMAND CAN SUBMIT
AN E504 TRANSACTION TO CHANGE DSP TO NONTAXABLE.
4. REQUEST WIDEST DISSEMINATION.//
BT