Dependency and Indemnity Compensation, or DIC, is a tax-free monthly benefit paid to eligible surviving spouses, children, and dependent parents of a service member who died in service or from a service-connected condition.
How much is DIC per month?
At the current-year rate the base DIC for a surviving spouse is about $1,613 per month, tax-free. Additional amounts apply for each dependent child, for the 8-year provision, and for aid and attendance or housebound status.
What is the DIC 8-year provision?
If the veteran was rated totally disabled for at least eight continuous years immediately before death and the spouse was married to them that entire period, an additional monthly amount is added to the base DIC rate.
No. Dependency and Indemnity Compensation is completely tax-free and is not reported as income by the surviving spouse or children who receive it.