We Speak Veteran™

Veterans Advantage Financial™

We Speak Veteran™

Certified Medicare Insurance Planner™* | Retirement Income Certified Professional®*

Medicare | Retirement | Life Insurance | Veterans Only

Table of Contents

Do Disabled Veterans Pay Property Taxes?

Is it necessary for handicapped veterans to pay property taxes? This is a question that a lot of people are wondering about, and the answer may surprise you! It all depends on the state in which you reside.

When it comes to handicapped veterans and property taxes, each state has its own set of rules and requirements. If you’re a disabled veteran who is 100% permanently and service-connected disabled, then you may be eligible for a complete exemption from paying property taxes in some states.

This might be fantastic news for individuals who have served our country and are now disabled. However, the rules surrounding this topic can be confusing, so let’s look closely at what is happening. Stay tuned!

Do 100 Percent Disabled Veterans Pay Federal Taxes?

Retirement pay from the military is taxable under Federal and state income taxes, regardless of when you retired or for how long you served. Almost all military disability retirement pay and veterans’ benefits, including service-connected disability pension payments, are tax-free. This rule, however, has a few exceptions.

If you’re a disabled veteran who is disabled due to your service and you receive disability compensation from the Department of Veterans Affairs (VA), you may have to pay taxes on this income. The same is true for disabled veterans who receive VA pension payments. This is because the IRS considers these advantages to be taxable income. However, there are some exceptions to this rule. 

If you’re receiving disability compensation or pension payments from the VA because of a service-connected disability, you don’t have to pay taxes on these benefits. Additionally, suppose you’re receiving disability compensation or pension payments from the VA because of a nonservice-connected disability. In that case, you may be exempt from paying taxes on these benefits if your income is below a certain threshold.

To find out if you have to pay taxes on your disabled veteran benefits, you should speak with a tax professional or accountant who can help you understand your specific situation.

What Tax Breaks Do Veterans Get?

Disabled veterans may be eligible for different tax breaks, depending on their residence. For example, some states offer property tax exemptions for disabled veterans, while others offer discounts on income taxes. Veterans may also be eligible for federal tax breaks, such as the Earned Income Tax Credit or the Child Tax Credit.

In addition to tax breaks, disabled veterans may also be eligible for other benefits, such as disabled parking placards or free access to state parks. Each state offers different benefits for disabled veterans, so be sure to research the benefits available in your state.

If you are a disabled veteran and have questions about your taxes, don’t hesitate to reach out to a tax specialist for help. They can address your queries and assist you in maximizing your tax benefits.

Can The IRS Take Your VA Disability Check?

The IRS cannot legally levy VA disability benefits or public assistance checks you receive, such as a VA pension. Although VA disability benefits cannot be taxed, many other things you own may be subject to levies, such as vehicles, real estate, bank accounts, and wages earned from a current job. The best way to avoid having your assets seized by the IRS is to stay on top of your tax payments and file your return on time every year. If you’re unable to pay your taxes in full, you can request a payment plan or apply for an offer in compromise.

The Internal Revenue Service cannot withhold or levy federal taxes from your VA disability benefits. The same rules apply if the IRS attempts to collect benefits to satisfy a tax debt. The agency can collect taxes from many other sources, including your wages, bank accounts, and real estate.

Do Disabled Veterans Have to File a Tax Return?

It is important to remember that Veterans’ Disability Benefits are not taxed. As a result, if this is your sole source of income, you do not need to submit a federal tax return. You must file a combined tax return if you and your spouse both work. However, disability income should not be included in your gross income. your spouse’s employment income.

If you have other income in addition to your disabled veteran status, you’ll want to file a tax return to get the deductions and credits you’re entitled to. The earned income credit, the child and dependent care credit, and the adoption credit are examples of these. You can also deduct medical expenses, charitable contributions, and certain job-related expenses.

Who is Exempt From Paying Property Taxes?

A number of disabled veterans are free from property taxes. The most typical exemption is for people who have a VA rating of 100% disability. To be eligible, the disabled veteran must own the home and have a service-connected disability. Other exemptions may be available for veterans with a 50% or greater disabled rating, as well as surviving spouses of disabled veterans.

Exemptions and tax breaks are available in every state, but the rules vary from state to state. Therefore, conducting research and learning about your options is critical. You might be shocked at how much money you can save each year.

What Does the IRS Consider a Permanent Disability?

If you have a physical or mental condition that limits your ability to partake in any sort of gainful activity, then you are permanently disabled. A physician must certify that the ailment has lasted or is expected to remain for at least 12 months or that it will end in death if left unchecked. You must also be unable to perform any sort of substantial work due to your disability. As a disabled veteran, you may be eligible for a property tax exemption if you meet certain criteria. Suppose the Department of Veterans Affairs (VA) certifies that you have a permanent and total disability. In that case, you can replace the physician’s statement with VA Form 21-0172, Certification of Permanent and Total Disability. You must have VA Form 21-0172 signed by a person authorized to do so. Your local VA regional office can provide you with this form. You can also get VA Form 21-0172 from the Veteran Benefits website.

If you are a disabled veteran without a home, you may still be eligible for a property tax exemption. You would need to provide your local tax assessor with a copy of your disability award letter from the VA. The letter must state that your disability is service-connected and that you are receiving disabled veteran benefits. You might also be asked to provide proof of residency, such as electricity bills or rental contracts.

Make Appointment with Chris Duncan

Scroll to Top