As a veteran, you could be eligible for certain tax breaks and benefits on both the federal and state level. Here’s what you need to know.
Do you get a tax break for being a veteran?
Yes, the IRS has several tax breaks for veterans available:
- Tax-free pensions, disability payments, grants, and dependent-care assistance
- Tax-free VA education and training benefits such as the Post-9/11 GI Bill
- Earned Income Tax Credit (EITC) that benefits low- to moderate-income taxpayers, including many veterans
- In some instances, extra time to file an amended return
What states give veterans tax breaks?
As a qualifying veteran, you can receive tax breaks at the state level depending on which state you live in — and sometimes which city or county you live in. For more information about the tax exemptions available, it’s best to contact your local municipal tax assessor’s office.
Some state-level tax benefits for veterans or disabled veterans include exemptions from property taxes; housing assistance; education benefits; and financial assistance such as grants, free access to state parks and campgrounds, or preference when applying to jobs.
How do VA benefits affect taxes?
You don’t have to pay taxes on the VA benefits you receive. This includes tuition, training fees, test fees for licenses and certifications, tutor costs, work-study, books, or housing. Because of this, you should not include VA education benefits as income when filing your taxes.
To get a better idea of what your taxable income might be, try out our taxable income calculator.
You can also try out our helpful tax preparation checklist to help ensure you have all the information you might need before you file.
Do you get a tax refund if you are on VA disability?
According to the IRS, disabled veterans might be able to claim a federal tax refund if you either had an increase in your percentage of disability from the U. S. Department of Veterans Affairs, or you were granted a Combat-Related Special Compensation after an award for Concurrent Retirement and Disability.
Do you have to disclose VA disability as income?
You should not include veteran disability benefits with your gross income when filing your income tax return. Disability benefits may include:
- Disability compensation and pension payments for disabilities (paid to you or your family)
- Grants for wheelchair-designed homes or grants for motor vehicles if you lost your sight or use of limbs
- Dependent-care assistance benefits
Does being a veteran give you a break from property taxes?
Disabled veterans are exempt from property taxes in the following states: Alabama, Arkansas, Florida, Hawaii, Illinois, Iowa, Maryland, Michigan, Nebraska, New Hampshire, New Jersey, New Mexico, Oklahoma, Pennsylvania, South Carolina, Texas, and Virginia.
For a complete list of disability requirements and property tax exemptions in each state, check out this Veterans United article.
What veteran benefits are non-taxable?
According to the IRS, any payments you receive for “education, training, or subsistence under any law administered by the VA are tax-free.” You do not need to include those payments as income on your federal tax return.
Do you get extra money from Social Security for being a veteran?
Your Social Security benefits are based on your earnings, not your military pension. The Social Security Administration (ssa.gov) offers different credits based on when you served — these credits can be added to your Social Security earnings record.
Main takeaways
We have many tax preparation options for both veterans and active-duty service members. When you file with TaxAct®, we’ll guide you through the filing process and ask you detailed questions to ensure all your income is reported correctly.