Percent Disabled Veteran And Surviving Spouse Frequently Asked Questions
Translation:
Tax Code Section 11.131 provides an exemption of the total appraised value of the residence homestead of Texas veterans awarded 100 percent compensation from the U.S. Department of Veterans Affairs due to a 100 percent disability rating or determination of individual unemployability by the U.S. Department of Veterans Affairs.
No. This exemption only applies to a disabled veteran’s residence homestead.
Disabled veterans owning property other than a residence homestead may qualify for a different exemption under Tax Code Section 11.22, which can be applied to any property the disabled veteran owns. Additional information on the qualification, application deadlines and how to apply for the disabled veteran exemption is available in the Disabled Veteran and Surviving Spouse FAQ. An eligible disabled veteran may receive both exemptions.
Yes. A disabled veteran with a service-connected disability awarded 100 percent disability compensation and a disability rating of 100 percent is eligible for this exemption.
No. A disabled veteran with a service-connected disability awarded 100 percent disability compensation is eligible for this exemption if he or she is either 100 percent disabled or is unemployable.
The deadline for filing an exemption is April 30. However, the Tax Code allows applications for certain exemptions to be filed after the deadline has passed.
The total appraised value of the disabled veteran’s residence homestead.
As A 100% Disabled Veteran Must I File A Tax Return
Please see this great answer by TurboTax Doninga:
If you have Social Security Disability payments, they would be reported on a federal tax return, however, if Social Security is the only income that you would be reporting, a federal tax return does not have to be filed. However, if you do have any other income to report, then enter the benefits reported on SSA-1099. VA disability payments are not reported on your return.
To enter your Social Security benefits reported on form SSA-1099
- Scroll down to Retirement Plans and Social Security
- On Social Security , click the start or update button
Connecticut Property Tax Exemption
Honorably discharged wartime veterans in Connecticut may qualify for a $1,500 property-tax exemption on the assessed value of their primary residences.
To qualify, veterans must have served at least 90 days of active duty during wartime. According to MyArmyBenefits, the Armys official military benefits website, individual municipalities also provide exemptions based on income or disability. In some cases, surviving spouses are also eligible for these tax breaks.
See all Connecticut veterans benefits.
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Do Disabled Veterans Pay Property Taxes In Missouri
As a disabled veteran, you might be eligible to receive credit up to $1,100 in tax exemption if you own property. If youâre a renter, then the maximum credit can be $750.
But there are a few requirements.
First, you have to be considered 100 percent disabled due to your military service. Also, the exemption can only apply to your primary residence, meaning the home where you live.
There are income limits in place to qualify, depending on if youâre filing as a single individual or a couple. But if youâre a disabled veteran, then you donât need to include your VA payments when calculating your income for eligibility.
For full details on how to qualify for tax credits as a disabled veteran, check out this Missouri Property Tax Credit eligibility chart.
Full property tax exemption for former POW
If youâre also a former prisoner of war , along with being 100 percent disabled due to military service, and itâs for your primary residence, then youâre fully exempt from property taxes in Missouri.
This is according to Article XII, Section 2 of the Missouri Constitution.
Youâll need to provide evidence of your former POW status in one of the following ways:
â Form DD 214 for Ex-Prisoner of War Status.
â A letter verifying former POW status from the National Archives and Records Administration , or the United States Department of Veteran Affairs.
Which Disability Benefits Are Tax
In addition to receiving tax-free disability payments, the IRS also does not require disabled veterans to pay taxes on the benefits indicated below.
- VA grants used to make a home more accessible for veterans who use a wheelchair.
- VA grants used to design a specialty vehicle for veterans who lost their sight or the use of one or more of their limbs.
- Benefits received under the VA dependent-care assistance program.
You do not have to file any type of tax paperwork with your federal return if you receive any of these tax-free disability benefits. The IRS knows that disability benefits are free to veterans and applies the tax break automatically.
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Do I Have To Report My Va Disability As Income
The VA issues disability checks to eligible veterans without deducting federal, state, social security, or Medicare taxes. When filing your federal tax return for the previous year, the IRS does not require you to claim VA disability as part of your gross income. Want to know what else is tax-free from VA? Check below.
Applying For Tax Breaks
While each state is different, property tax exemptions may require you to file paperwork to claim them. You can get in touch with the agency that sends property tax bills to find out who you need to speak with. Then, you can discover what you need to do to get any applicable disabled veteran exemptions added to your account. Once you have that information, you’ll want to get the exemption applied to your account as soon as possible.
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Are Your Veterans Benefits Taxable
Find out if you need to report the veterans benefits you receive as income on your tax return.
After you leave the military, veteran benefits may play a key role in helping you enjoy life as a civilian. You may receive a variety of benefits, from a pension to disability compensation to the GI Bill. If youre like many veterans, an important question occurs to you at this time of year: are VA benefits taxable?
The answer isnt as simple as the question. Whether or not your VA benefits are taxable depends on which benefits you receive and what your circumstances are. Its always a good idea to consult a tax professional about your individual circumstances. However, the following general information can help you understand when you mayor may notowe taxes.
Louisiana Property Tax Exemptions
Louisiana offers a property tax exemption on the first $75,000 of the assessed value of a primary residence to all qualifying homeowners, according to the Louisiana VA.
The state increases this exemption to $150,000 for veterans with a 100% VA rating for a service-connected disability or a 100% individual unemployability rating.
A proposed 2022 amendment would exempt these veterans from paying any state property taxes and would also extend these tax benefits to surviving spouses.
It would also create an additional tax exemption for veterans with at least a 50% VA disability rating.
See all Louisiana veterans benefits.
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How This Affects Your Taxes
Service-connected disability compensation is tax-free on both the federal and state levels.
Disabled veterans may be eligible to claim a federal tax refund based on two situations:
- An increase in the veteran’s disability percentage as deemed by the VA .
- The combat-disabled veteran applying for, and being granted, Combat-Related Special Compensation, after an award for Concurrent Retirement and Disability.
Your “service-connected” disability payments can vary depending on the rating the VA applies to your disability.
What You Need To Register For Ebenefits
To properly register with the eBenefits system and obtain your official DS Logon account, youll need to already be enrolled in the U.S. Department of Defenses Defense Enrollment Eligibility Reporting System . DEERS is a computerized database containing personal and eligibility information on service members and their eligible family members. Active duty and retired service members are registered in DEERS automatically. You may find that you need to update your personal information, and you can do that on the website. If you find that you are not enrolled in DEERS, you must correct the error and update your information before you can proceed.
With your DEERS enrollment, you can obtain your DS Logon account in one of three ways:
- Online through the eBenefits website.
- In person through a VA regional office. Bring your two I-9 identity documents. Once your identity has been verified, youll receive an activation letter via U.S. mail typically within 12 business days. Use the information in this letter to activate your account online.
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Housing Grant Tax Status
Have you received a VA grant to purchase or modify a home because of a disability such as blindness, severe burns or the loss of your arm, leg or lower extremities? The VA operates two housing programs the Specially Adapted Housing and the Special Housing Adaptation grants to assist veterans with qualifying disabilities. Housing grants through these programs are nontaxable.
Through these two programs, some disabled veterans with permanent and total service-connected disabilities receive grants to purchase or construct adapted homes that will enable them to live more independent lives. Disabled veterans may use the grants to modify their existing houses to accommodate their disabilities. For instance, if your disability requires you to use a wheelchair, a housing grant that allows you to purchase a house adapted for wheelchair living may be nontaxable. In certain situations, you may use the grants to pay down a mortgage loan on a house that’s already been adapted but was purchased without the VA’s financial assistance. The bottom line is that if you received grant funds from the VA to purchase an adapted home or modify your existing home to accommodate your disability, you can exclude that grant money from your income.
Hawaii Property Tax Exemption
The state of Hawaii offers disability tax exemptions, according to the County of Hawai`i Real Property Tax Office. Those with impaired sight or hearing can receive a $50,000 tax exemption.
Veterans with total disabilities may be eligible for a property tax exemption for up to 50% of the minimum taxable value. They may also qualify for other exemptions based on age and income.
See all Hawaii veterans benefits.
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You May Need To File A Tax Return
Certain disability deductions or exemptions require filing a tax return. If your state’s income tax offers benefits, they may require filing a state return to claim those benefits. However, you sometimes have to file a federal tax return to get a benefit, too.
If the Department of Veterans Affairs determines that your percentage of disability has increased, you might be able to get a federal income tax refund by filing an amended tax return. Normally, the income is correctly reported as taxable or non-taxable on the applicable tax forms you receive, based on your disability status. When you file your tax return with TurboTax, you’ll simply enter the information from these forms, and the program will then treat the income as either taxable or non-taxable.
When that status changes for a previous year after you’ve filed a return for that year, your previous tax returns don’t automatically correct themselves.
- Instead, you’ll need to go back and adjust previous tax returns to reflect your new disability percentage properly.
- Amending those returns with your new, higher disability percentage could result in a refund.
- This may also be applicable to combat-disabled veterans that apply for and are granted combat-related special compensation after they receive an award for concurrent retirement and disability.
Oregon Property Tax Exemption
According to the Oregon Department of Revenue, qualifying disabled veterans and surviving spouses in Oregon may apply for an income-based Oregon property tax exemption on their primary residences. Veterans must have a VA disability rating of 40% or higher to qualify.
See all Oregon veterans benefits.
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Principal Place Of Residence
In order for property to qualify for the Disabled Veterans Exemption, the property must be used as the claimants principal place of residence. The property may be owned by the veteran, the veterans spouse, or the veteran and spouse jointly. If two or more qualified claimants own a property in which they both reside, each claimant is entitled to the Disabled Veterans Exemption to the extent of his or her interest in the property.
The one exception to the requirement that the property be the claimants principal place of residence is when the claimant is confined to a hospital or other care facility, and the property would be the claimants principal place of residence were it not for their confinement, provided that the property is not rented or leased to another party.
For property tax purposes, the definition of a principal place of residence closely parallels the legal doctrine of domicile. Under this doctrine, a persons domicile depends on two factors: physical presence and intention. The combination of both factors will be used by the county assessor to make the final determination of a claimants primary residence.
Physical presence may be considered to have been established at the place where:
When considering whether or not physical presence has been established, the assessor should consider these elements as a whole. It is not required that all of these elements apply in order for physical presence to be established.
Are Veterans Entitled To Other Tax
In addition to the disability benefits listed above, veterans and their loved ones may be eligible for the following tax-free benefits:
- Dependency and Indemnity Compensation This is available to the surviving spouse, child, or parent of a veteran who died from a service-related injury or illness.
- Special Monthly Compensation This is additional compensation that helps cover certain disabilities such as the loss of sight, loss of a limb, or need for regular aid and attendance due to a service-connected disability.
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What Does North Carolina Offer Disabled Veterans
According to North Carolina Veteran Financial Benefits Property Tax: Any Veteran who has been discharged dishonorably and has a 100% permanently and totally disabled rating is eligible for a $45,000 deduction on their property tax. In addition, spouses of veterans who apply for DIC from the VA are eligible.
About Completing Tax Forms
The net amount of benefits that you receive from the SSA should be entered in Box 5 of Form SSA-1099 . Enter that amount on line 6a of Form 1040 or Form 1040-SR .
The taxable portion of the benefits included in your income and used to calculate income tax liability depends on the total amount of your income and benefits for the taxable year. Enter the taxable portion of your Social Security benefits on line 6b of Form 1040 or Form 1040-SR.
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Maine Property Tax Exemptions
Maine residents over age 62 who served in wartime and veterans with a 100% VA disability rating can apply for a $6,000 property tax exemption, according to the Maine Bureau of Veterans Services.
Paraplegic veterans who received a federal grant for specially adapted housing can also apply for a $50,000 property tax exemption.
See all Maine veterans benefits.
Are Lump Sum Severance Payments Taxed
Veterans who were discharged from their military service on account of a medical disability may receive a one-time lump sum severance payment from the Department of Defense .
Under the Combat-Injured Veterans Tax Fairness Act of 2016, veterans cannot be taxed on this lump sum disability severance payment. The DoD will identify veterans who were taxed on this sum to ensure they receive an amended tax return with their refund.
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California Property Tax Exemptions
California provides two levels of tax exemptions for disabled veterans and their surviving spouses.
To qualify for Californias disabled veterans exemption, veterans must be rated 100% disabled or at the 100% rate because of unemployability, according to the California State Board of Equalization.
The exemption varies annually according to inflation. In 2022, the basic exemption is $161,083. The low-income exemption is $241,627 for households earning no more than $72,335 per year.
Senate Bill SB-1073, introduced in April 2022 could provide partial property tax exemptions to disabled veterans with less than a 100% disability rating.
Senate Bill SB-1357 would extend a full property tax exemption to veterans who are fully blind or who have lost two or more limbs, regardless of their disability rating.
See all California veterans benefits.
Colorado Property Tax Exemption
Disabled veterans and their surviving spouses can apply for a 50% property tax exemption on the first $200,000 of their primary residences actual property value. Veterans must have a 100% permanent disability rating to qualify.
VA unemployability awards do not meet the requirement for determining an applicants eligibility, according to the Colorado Department of the Treasury.
House Concurrent Resolution HCR21-1001, introduced in 2021 may expand eligibility to veterans with at least a 50% permanent disability rating.
See all Colorado veterans benefits.
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Military Onesource Resources For Transitioning Service Members And Families
Military OneSource is a program funded by the Department of Defense that provides a range of free resources for Veterans and their immediate family up to 365 days after separation or retirement from the military. MilTax, Military OneSources tax services, provides online software for eligible individuals to electronically file a federal and up to three state returns for free through the Military OneSource website. The service also includes tax consultants available by phone to answer tax questions related to deployment, multi-state filing, and combat pay. They also share information on military-specific and civilian tax deductions and credits.
Military OneSource is available 24/7 at and online at MilitaryOneSource.mil.