Dependency and Indemnity Compensation is not

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Multiple Choice

Dependency and Indemnity Compensation is not

The key idea is how this benefit is taxed. Dependency and Indemnity Compensation is a tax-free, monetary benefit paid to eligible survivors of service members who died from a service-connected cause. Because it is not subject to federal income tax, it is best described as a non-taxable monetary benefit. It is not a one-time stipend and not a housing allowance; it’s a recurring monthly cash payment to eligible survivors.

The key idea is how this benefit is taxed. Dependency and Indemnity Compensation is a tax-free, monetary benefit paid to eligible survivors of service members who died from a service-connected cause. Because it is not subject to federal income tax, it is best described as a non-taxable monetary benefit. It is not a one-time stipend and not a housing allowance; it’s a recurring monthly cash payment to eligible survivors.

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