Veteran State Tax Exemption Changes and Updates

What changed for veteran state tax exemptions in 2024?

Several states updated their veteran tax exemption programs in 2024, adjusting eligibility rules, exemption amounts, and application procedures. The biggest changes came from states like Texas, Florida, Montana, and Alabama, which expanded property tax relief for disabled veterans and those receiving VA compensation. Some states also updated income tax exemptions tied to military retirement pay and disability benefits.

If you're a veteran or a surviving spouse, these updates could mean hundreds or thousands of dollars in tax savings this year but only if you know what changed and how to claim your benefit. Below, we break down the key changes, who qualifies, and what you need to do right now.

Which states made the biggest changes to veteran tax exemptions in 2024?

Not every state updated its veteran tax exemption rules this year. Here are the states where meaningful changes took effect in 2024:

Texas increased the homestead exemption amount for 100% disabled veterans, raising it to the full appraised value of the primary residence. This means qualifying veterans with a total disability rating owe zero property tax on their home.
Florida expanded eligibility for its property tax exemption for veterans with service-connected disabilities, now covering veterans rated at 10% or higher (previously, the threshold for any exemption started at 10%, but the proportional benefit was adjusted).
Montana updated its property tax assistance program for veterans, adjusting income thresholds and increasing the maximum tax assistance benefit. You can learn more about Montana's veteran property tax assistance program and how it works.
Alabama revised its ad valorem tax exemption for disabled veterans, expanding the benefit to cover surviving spouses in certain cases. For full details on eligibility and amounts, see the Alabama ad valorem tax exemption for disabled veterans.
New York raised the Alternative Veterans' Exemption limits for Cold War-era veterans, giving more property tax relief to those who served between 1945 and 1991.
Virginia extended its income tax exemption on military retirement pay, now allowing veterans aged 55 and older to exclude up to $20,000 of retirement income (phased in over previous years, fully effective in 2024).

To see how exemptions work across all 50 states, check our state-by-state breakdown of veteran tax exemptions.

Do these exemptions apply to property tax, income tax, or both?

It depends on the state. Most veteran tax exemption changes in 2024 affect property tax, which is the most common type of relief available to veterans at the state level. But some states also updated income tax rules, especially around military retirement pay and VA disability compensation.

Property tax exemptions

Property tax exemptions reduce the assessed value of your home (or eliminate it entirely) for tax purposes. For example, if your home is assessed at $250,000 and your state grants a $50,000 exemption, you only pay property tax on $200,000 of assessed value. In states like Texas, 100% disabled veterans pay no property tax on their primary residence at all.

Income tax exemptions

Some states exempt part or all of military retirement income from state income tax. In 2024, states like Virginia, Illinois, and Mississippi continued expanding these benefits. If you receive VA disability compensation, that income is already tax-free at the federal level, and most states follow suit. You can read more about state tax exemptions for veterans receiving VA compensation.

What does "disabled veteran" mean for tax exemption purposes?

This is one of the most confusing parts for veterans applying for these benefits. States define "disabled veteran" differently depending on the exemption. Most require a service-connected disability rating from the VA, but the required rating percentage varies.

Some states (like Texas) offer the largest benefits to veterans rated at 100% disabled.
Other states (like Florida and Alabama) provide proportional benefits starting at 10% or higher.
A few states use a flat benefit for any service-connected disability, regardless of the rating percentage.

Your VA disability rating letter is the key document. If you haven't applied for a disability rating yet, start with the VA state tax exemptions depend on that federal determination.

How do you apply for a veteran state tax exemption in 2024?

The application process varies by state, but here's what most states require:

Obtain your VA disability rating letter or proof of military service (DD-214).
Check your state's specific form many states have a dedicated application for veteran tax exemptions, separate from general homestead exemptions.
File with your county tax assessor or state revenue department most property tax exemptions are handled at the county level.
Meet the deadline many states require you to file by a specific date (often March 1, April 1, or the start of the tax year). Missing the deadline can cost you the entire year's benefit.
Renew if required some states require annual renewal, while others make the exemption permanent once approved.

What are the most common mistakes veterans make with state tax exemptions?

After years of helping veterans navigate these programs, certain mistakes come up again and again:

Not applying at all. Many veterans assume they don't qualify because their disability rating is "too low" or they're not retired from the military. In many states, any service-connected disability qualifies you for at least some property tax relief.
Missing the filing deadline. Most exemptions are not automatic. You have to apply, and late applications are often rejected until the following tax year.
Not updating your information. If your VA disability rating changes (especially if it increases), you may qualify for a larger exemption. You typically need to file an updated application.
Assuming federal benefits cover state taxes. VA disability compensation is federally tax-free, but state-level property tax exemptions are separate programs with their own rules and applications.
Forgetting about surviving spouse benefits. Many states allow surviving spouses to continue claiming the veteran's property tax exemption. If your spouse passed away, don't assume the benefit ended. Gold Star families may also qualify for additional protections see our guide on state tax exemptions for Gold Star families.

Are there income limits for veteran tax exemptions?

Some states do impose income limits, especially for property tax assistance programs. Montana, for example, uses household income as a factor in determining eligibility and benefit amounts. Other states have no income requirement at all if you meet the disability rating and service criteria, you qualify regardless of your income.

Always check your state's specific rules. An income limit that applies in one state may not apply in a neighboring state, even for the same type of exemption.

Can veterans claim both federal and state tax exemptions at the same time?

Yes. Federal VA benefits (disability compensation, pension, education benefits) are separate from state tax exemptions. Claiming a state property tax exemption does not affect your VA disability compensation, and receiving VA compensation does not automatically trigger a state exemption. You need to apply for each benefit independently.

What should veterans do right now?

If you haven't reviewed your state tax exemptions recently, take these steps today:

Pull out your VA disability rating letter and DD-214. Keep them accessible.
Look up your state's current veteran tax exemption rules they may have changed since you last checked.
Find your county tax assessor's website and locate the veteran exemption application form.
Check the filing deadline for your county. Mark it on your calendar.
If you're already receiving an exemption, verify that your benefit amount matches what you're entitled to under the 2024 rules. Some states increased amounts this year.
If your VA disability rating increased, file an updated application to capture the higher benefit.
Surviving spouses confirm whether you're still receiving the exemption and whether new protections apply to you.

Each state runs its own program with different rules, forms, and deadlines. Start with your state's department of revenue or county assessor's office, and don't wait until the last minute. These benefits exist because you earned them make sure you're actually getting them.

Note: Tax laws change frequently. The information above reflects updates as of early 2024. Always verify current rules with your state's official tax authority or a qualified tax professional before making decisions.