Q and A: IRS Garnishments

Question:: I have a tenant that has a VA benefit of $1100/month, but every month, the government garnishes $100 of the payment for unpaid taxes. What do I count as the income? ~ Patricia-New York

Answer: You must count the full, gross benefit in annual income. HUD Handbook 4350.3, Rev-1, Change 4, 5-6 L, says, “The full amount of periodic payments from annuities, insurance policies, retirement funds, pensions, and disability or death benefits is included in annual income…Payments such as Blank Lung Sick Benefits, Veterans Disability, and Dependent Indemnity Compensation for the Widow of a Killed in Action Serviceman are examples of such periodic payments.”

There are similar types of benefit payments, from Social Security Administration, that have unique rules related to the correction of prior overpayments. However, do not confuse those exceptions with this scenario. This is a garnishment, not a correction of an overpayment; these are VA benefits, not Social Security benefits.