The IT program is the entry-level program that provides a diversified work experience in a sheltered workshop environment or at the VA medical center. Generally, veterans progress from the IT program to the CWT program. Veterans who are unable to work in a normal work environment may continue in the IT program for an indefinite period.

The CWT program provides veterans with an individualized vocational assessment, a rehabilitation plan and work experience. Generally, participants perform work via a contractual agreement with local community employers. However, the VA pays participants from the Fund, except when they are in the Supported Employment phase of CWT.

The income the veteran receives while participating in the IT program is not wages for Social Security coverage purposes.

NOTE: The IRS considers IT income non- taxable medical services; therefore, the VA does not withhold Federal Insurance Contribution Act (FICA) tax nor does it issue a Form 1099.

The income the veteran receives while participating in the CWT program is not wages for Social Security coverage purposes.

NOTE: The IRS considers the income as non-taxable medical services; therefore, the VA does not withhold FICA tax nor does it issue a Form 1099.

Participants in the supported employment phase of the CWT program work for local community employers and receive pay directly from the employer. The income the disabled veteran receives from the employer while participating in the Supported Employment phase of the CWT program is wages for Social Security purposes.

NOTE: The veteran will receive a Form W-2 (Wage and Tax Statement), from the employer.

For information on how to treat this income for substantial gainful activity purposes, see policy and procedure on military service in DI 10505.023 and see policy and procedure on special employment situations in DI 10505.025.