Ania Ortiz is a retired member of the U.S. Armed Forces. 

• She received Form 1099-R from the Defense Finance & Accounting Service. 

• Form 1099-R indicates $25,000 in Box 1 and Box 2a. 

• Ania is considered 100% disabled and received a letter of determination from the Department of Veterans Affairs (VA). 

• She received a payment in the amount of $9,700 from the VA for disability.

7. The $25,000 from the Defense Finance & Accounting Service is subject to which type of tax?

a. Federal income tax 

b. Social Security tax 

c. Medicare tax 

d. None of the above

8. The VA does not issue Form 1099-R for disability payments.

a. True 

b. False

Answer rating: 100% (QA)

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