It is a sad and troublesome issue in the US Military. But the stress brought on US Soldiers by their job and from previous or looming deployments leads to hundreds of suicides every year. According to a recent DoD publication 492 US Servicemembers took their own lives in 2022. In 2021 the number reached 523. That the issue does not go away just because one leaves the Military is highlighted by the 2022 National Veteran Suicide Prevention Report. Since 2001 on average more than 6.000 US Veterans have taken their lives every year. And still, overall US Veterans face a disproportionately higher risk of committing suicide than their American peers without a service record. According to this abovementioned VA report, the differential in rates was smallest in 2002, when the Veteran rate was 12.1% higher than for non-Veterans, and largest in 2017, when the Veteran rate was 66.2% higher. In 2020, the rate for Veterans was 57.3% higher than that of non-Veterans.
And while we have discussed in other articles how the US Military takes care of its own (VA benefits, DIC, SBP….) the intricacies are not commonly known amongst German tax offices. All too often it is just convenient – or common practice – to treat a benefit that looks like a certain type of retirement just like that type of retirement without asking additional questions.
This is where the taxperts come in. As discussed before there are several angles we can work to make sure that those benefits – depending on the circumstances – will be either completely tax-free or at least only considered for tax bracket purposes in Germany but go otherwise untaxed.
We will need to conduct research into your deceased spouse’s medical record, his services history and evaluate DD214, VA letter and the likes to make sure that the German tax office doesn’t touch any of the benefits your spouse paid for with his life.
Please let us know if you feel like your husband’s suicide is not getting the attention it deserves by a German tax office or your current German tax advisor. We are happy to expand their horizon.
Update June 2026: We have covered VA benefits extensively in several articles. However, some German tax offices have argued that those benefits are not as tax irrelevant as they are under US law, and would need to be considered for tax rate purposes (=Progression), effectively putting people’s German tax base in a higher tax bracket due to the circumstance that they are drawing VA benefits. At taxpatation we have always thought this was unsubstantiated, grossly wrong and put up a fight over it. On April 23 the German Tax Supreme court has confirmed this stance and ruled that the VA benefits are NOT to be considered even for tax rate purposes. Effectively this means that you should make prosaic mention of them but you will not see any tax effect at all. Albeit the ruling was not for one of our clients we are happy that it mirrored a position we have long been taking and fighting for separately with various tax offices! We would like to point out though that the ruling pertained to actual VA disability benefits, not DIC ones, but there is no reason the latter should see any other treatment. However, we continue to advice that there should be at least a prosaic mentioning, so one can fight it out in the open with the tax office if need be. Please let your taxperts know if you are wondering whether your VA or DIC benefits are being treated properly – as always, we are happy to brawl on your behalf!
