State Tax Exemptions for Medal of Honor Recipients

What state tax exemptions do Medal of Honor recipients actually receive?

Medal of Honor recipients are eligible for a range of state-level tax benefits, though these vary significantly depending on where they live. The most common exemptions include property tax waivers, income tax reductions or full exemptions on military retirement pay, and sales tax breaks on certain purchases. Because the Medal of Honor is the highest military decoration awarded by the United States, states have created some of their most generous tax relief programs specifically for its recipients.

At the federal level, Medal of Honor recipients receive a special pension that is entirely tax-free. As of 2024, this pension is approximately $1,698.71 per month, according to the U.S. Department of Veterans Affairs. State exemptions sit on top of this federal benefit, meaning recipients can potentially reduce their overall tax burden even further depending on their state of residence.

Which states offer the most tax benefits to Medal of Honor recipients?

Several states offer particularly strong tax relief for Medal of Honor holders. Here are some notable examples:

Texas Provides a full property tax exemption on the recipient's primary residence, regardless of home value. This is one of the most generous benefits available in any state.
New York Offers a property tax exemption for veterans with disabilities or qualifying service, and Medal of Honor recipients may receive enhanced exemptions depending on the county.
Illinois Grants a significant property tax exemption and an additional homestead exemption for Medal of Honor recipients.
Virginia Exempts Medal of Honor recipients from state income tax on their military retirement pay entirely.
Florida Has no state income tax at all, and provides additional property tax relief for qualifying disabled veterans and distinguished service members.
California Offers a property tax exemption on the first $196,263 of assessed value (as of 2024) for Medal of Honor recipients. This amount adjusts periodically for inflation.

Some states go further than others. If you're weighing where to settle down, comparing which states rank highest for veteran tax benefits can help you make a more informed decision.

Does every state offer a tax exemption for Medal of Honor recipients?

No. Not every state has a specific tax exemption carved out for Medal of Honor recipients. Some states lump these benefits under broader categories like veteran disability exemptions or general military service tax relief. Others may offer discounts or partial exemptions rather than full waivers.

For example, states like Montana and Wyoming offer general veteran property tax relief programs that apply to a wide range of service members but don't single out Medal of Honor holders with enhanced benefits. In contrast, states like Texas and Illinois specifically name the Medal of Honor in their tax code as a qualifying condition for greater exemption amounts.

The key takeaway: never assume your state has or doesn't have a benefit without checking directly with your state's Department of Revenue or a veterans service organization.

How do property tax exemptions work for Medal of Honor recipients?

Property tax exemptions are the most common state-level benefit. In states that offer them, the exemption typically reduces the assessed value of your home before taxes are calculated. Here's a simplified example:

Your home is assessed at $300,000.
Your state offers a $50,000 property tax exemption for Medal of Honor holders.
Your property tax is calculated on $250,000 instead of $300,000.
At a mill rate of 1.5%, you save $750 per year.

In states like Texas, the exemption covers the full assessed value, meaning you pay zero property tax on your primary residence. That's a benefit worth thousands of dollars each year depending on your home and local tax rate.

If you want to explore this further, our guide to veteran property tax exemptions by state breaks down what each state actually offers.

Are Medal of Honor benefits different from regular veteran tax exemptions?

Yes, and this is an important distinction. Many states offer standard veteran tax exemptions based on wartime service, disability rating, or age. Medal of Honor recipients often qualify for enhanced versions of these same programs higher exemption amounts, fewer eligibility restrictions, or additional categories of tax relief that aren't available to other veterans.

For instance, while a veteran with a 50% disability rating might receive a modest property tax reduction in a given state, a Medal of Honor recipient in the same state might receive a full exemption without any disability requirement at all. The award itself is treated as sufficient proof of extraordinary service.

That said, Medal of Honor recipients can also qualify for the same general veteran benefits available to others. If you're over 65, you may be able to combine your Medal of Honor exemption with the property tax exemptions available to veterans over 65 in your state.

What income tax benefits exist for Medal of Honor recipients?

Income tax relief varies by state but generally falls into one of these categories:

Full state income tax exemption on the Medal of Honor pension (most states that impose income tax do not tax this federal pension).
Military retirement income exclusion Some states allow Medal of Honor holders to exclude all or part of their military retirement pay from state taxable income.
Special deductions or credits A handful of states provide additional credits on state income tax returns specifically for distinguished service award recipients.

The federal Medal of Honor pension is not taxed at the federal level. Most states follow suit and also exempt it from state income tax. But if you receive military retirement pay in addition to the Medal of Honor pension, state treatment of that retirement income is where you'll see the most variation.

For example, New Hampshire offers specific tax credits for veterans, and understanding how to apply can make sure you don't miss savings you're entitled to.

How do you apply for a Medal of Honor tax exemption?

The application process depends on your state and the type of exemption. Here's a general step-by-step:

Locate your state's application form Visit your state's Department of Revenue or local tax assessor's website. Many have downloadable PDFs specifically for veteran or Medal of Honor exemptions.
Gather documentation You'll typically need your DD-214 (discharge papers), Medal of Honor certificate or official documentation from the military, proof of residency, and property ownership records (for property tax exemptions).
Submit to your local tax assessor Property tax exemptions are usually filed at the county or municipal level, not directly with the state. Income tax benefits are claimed on your state tax return.
Follow up Don't just submit and forget. Call or check online to confirm your exemption was applied. Errors happen, and catching them early avoids overpayment.

Common mistakes Medal of Honor recipients make with tax exemptions

Here are pitfalls worth avoiding:

Assuming benefits are automatic In most states, you must apply. The exemption will not be applied to your property tax bill or income tax return unless you file the correct paperwork.
Not renewing Some states require annual renewal or periodic re-certification of your exemption. Missing the deadline can mean losing the benefit for that tax year. Iowa, for example, has specific deadlines for veteran property tax exemptions that must be met.
Overlooking combined benefits You may qualify for multiple exemptions at once (Medal of Honor + age-based + disability-based). Stacking these legally can multiply your savings.
Only checking one level of government Tax exemptions may exist at the state, county, and municipal levels. Check all three.
Failing to update your address If you move, your exemption doesn't transfer. You need to refile in your new jurisdiction.

Can a surviving spouse keep the tax exemption after the recipient passes away?

In many states, yes. Surviving spouses of Medal of Honor recipients can often continue receiving property tax exemptions after the recipient's death, provided they don't remarry and the property remains their primary residence. The specific rules vary by state. Some states cap the exemption amount for surviving spouses, while others maintain the full benefit.

This is one of the most commonly overlooked benefits. If you're a surviving spouse, contact your local tax assessor's office and ask specifically about continuing a Medal of Honor exemption. You'll likely need to provide a death certificate along with your existing exemption documentation.

Checklist: Claiming your Medal of Honor state tax exemption

✅ Identify your state's specific Medal of Honor tax benefits by contacting your Department of Revenue.
✅ Check county and municipal level exemptions don't stop at the state level.
✅ Gather your DD-214, Medal of Honor documentation, and proof of residency.
✅ File the correct application with your local tax assessor for property tax exemptions.
✅ Claim income tax benefits on your annual state return.
✅ Ask about stacking multiple exemptions (age, disability, Medal of Honor).
✅ Confirm your exemption was applied after filing don't assume.
✅ Set a calendar reminder for renewal deadlines if your state requires them.
✅ If you move, refile in your new jurisdiction immediately.
✅ Explore whether your surviving spouse can continue receiving benefits.

Next step: Contact your county tax assessor's office this week. Ask for their veteran exemption application, specifically mentioning your Medal of Honor status. Many offices have staff dedicated to helping veterans with these filings, and getting the process started sooner means you won't miss the next tax cycle.