Although the pain that goes with a 100% disability rating from the Department of Veterans Affairs is jarring and life-altering for a veteran, some benefits of having one often go unnoticed. Many times, a monthly VA disability compensation is just the tip of the spear. For homeowners, some of the most valuable ones are buried deep in state property tax laws.
States like Texas, Florida, and New Jersey offer qualifying disabled veteran exemptions that can wipe out property taxes on a primary residence. Other states also have their own state-level reductions, and some are available to those with a less than 100% disability rating.
These are not federal VA benefits, and veterans must meet state-specific requirements and file with a local tax ordinance authority in that region. Sometimes, if a veteran doesn’t apply for these benefits, they actually don’t have them automatically applied to their taxes. Here are five state veterans benefits that disabled veterans should know about.
Texas: Individual Unemployability Can Qualify for the Full Exemption
The Lone Star State provides one of the country’s most significant tax benefits for disabled veterans. Those who have received a 100% VA disability rating and the compensation that goes with it can potentially receive an exemption covering the entire appraised residence of their homestead.
This also extends to those veterans who have a 100% rate of individual unemployability, known as TDIU, who can qualify as well.
This distinction is relevant for those who don’t have a 100% disability rating but have service-connected conditions that prevent them from effectively holding gainful employment.
Another great thing about this benefit is that Texas allows a generous window for veterans who have failed to claim it. An application for the exemption can be filed up to five years after the delinquency date for the applicable property taxes.
Florida: Buying a Midyear Home Can Trigger a Tax Refund
Florida has a state exemption that exempts the homestead of an honorably discharged veteran with a service-connected total and permanent disability from property taxation. A less obvious extension of this exemption concerns veterans who buy a home during the year.
Under Florida law, qualifying veterans who acquire a new property between Jan. 1 and Nov. 1 may be entitled to a prorated refund of ad valorem taxes paid on the newly acquired home. The veteran must apply for and receive the exemption on that property for the following tax year.
This basically means that veterans moving into Florida shouldn’t assume that this falls into their property taxes just because they bought after Jan. 1. Check with a local accountant to see the tighter restrictions.
Illinois: You Don’t Need a 100% Rating
Illinois illustrates why veterans should not just assume these benefits begin only at a 100% VA rating.
They have a thing called the Standard Homestead Exemption for Veterans with Disabilities. It provides different levels of relief based on the individual rating. Veterans rated 30% to 49% receive a $2,500 reduction in equalized assessed value, while those rated 50% to 69% receive a $5,000 reduction.
Anyone who has a 70% or higher has $250,000 in equalized assessed value of their property that is exempt from taxation. As well as this benefit, veterans who are in this category are exempt from paying property taxes on their primary residence, subject to the program’s guidelines, of course.
For those who are rated at 100%, this should serve as a friendly lesson that sometimes you don’t need to have a full disability rating to be considered, and to apply early when possible.
Pennsylvania: Earning Above the Income Threshold Doesn’t Automatically Disqualify
Pennsylvania has a program where financial need is a huge part of their tax-exempt status. Veterans must have a 100% permanent service-connected disability, receive TDIU, or meet other program-specific needs in order to be eligible.
In Jan. 2025, applicants who made less than $114, 637 would be considered as receiving a presumption of financial need. But veterans who earn more than that shouldn’t automatically assume that they are ineligible.
If applicants can demonstrate that financial need is experienced by a family or individual (counting expenses, childcare, and other things), they may be eligible. The tax exemption, called the Pennsylvania Disabled Veterans’ Real Estate Tax Exemption, is what they are trying to qualify for.
Veterans who have been denied before are encouraged to apply again by the state and to show they have now fallen into the newer threshold for financial need.
New Jersey: The Application Can Be Filed During the Tax Year
New Jersey has an annual tax exemption for qualifying veterans who have been honorably discharged and those who hold a 100% disability rating. Unlike benefits tied to a single annual filing season, New Jersey’s disabled veteran exemption can be applied for with the municipal tax assessor during the tax year.
For those who missed it, don’t fret. The application materials state that governing bodies have the ability to return taxes that would have been exempt if the claim had been filed, although some restrictions do apply.
The VA rating is only the Beginning
Property tax rules vary by state. Requirements are broad and wide-ranging, and all sorts of factors such as residency, homeownership, income, surviving spouses and filing deadlines can change eligibility.
Veterans should check their state veteran’s agency to see what their property is eligible for, and for those that qualify for an exemption, a simple application could remove one of the highest recurring costs of owning property.
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