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CRSC vs CRDP Tax Implications

The tax implications of switching from Combat-Related Special Compensation (CRSC) to Concurrent Retirement and Disability Payments (CRDP) for veterans, including the effects on taxable income, filing status, and marginal tax rates.

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Jan 26, 2026
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What are the tax consequences of switching from CRSC (tax‑free) to concurrent receipt for different filing situations?

Switching from CRSC (tax‑free special compensation) to CRDP (taxable restoration of retired pay) changes the tax character of retired income and can alter liability, refunds, and effective marginal ra...