Disability retirement pay you receive as a pension, annuity or similar allowance for an injury or sickness resulting from active service is left out of your taxable income. The same treatment covers VA disability compensation and pension payments to veterans or their families, grants for a home designed for wheelchair living, grants for a motor vehicle if you lost your sight or the use of your limbs, and benefits paid under a dependent-care assistance program.
There is nothing to apply for. Leave these payments out of the income you report. See IRS Publication 525 for the federal treatment that Oregon follows.
Your VA award letter or retirement orders showing the payments and what they are for.
