Veteran Tax Benefits: Federal & State Breaks 2026

State tax breaks

Disabled veterans can qualify for property tax exemptions at the state level. These tax breaks, usually tied to a specific disability rating, can help veterans save thousands of dollars. You can view a list of all property tax exemptions by state and disability percentage here. However, since tax laws often change, verifying the tax structure with your local taxpayer assistance center, state tax office or tax professional is best.

Military retirement pay may be untaxed: Many states do not tax military pensions, while some offer partial exemptions and very few tax them fully or partially. If you believe you are eligible, verify the tax law with your local taxpayer assistance center, state tax office or tax professional.

Specific state tax breaks for veterans

California: The Golden State waives license taxes and fees for honorably discharged veterans who sell any goods except alcohol.

General property tax exemption: Service members, veterans and eligible family members may receive an exemption of up to $4,000.
Veterans with a 100 percent disability rating and their surviving spouses may receive a significant reduction in their taxable home value, with additional benefits available to those with lower incomes.

Florida: Veterans in the Sunshine State with a minimum disability rating of 10 percent may be eligible for a $5,000 reduction in their property’s assessed value.

Veterans with total and permanent service-related disabilities may be eligible for a total exemption from property taxes. A similar exemption is available to veterans who use wheelchairs.
Veterans 65 or older who are partially or permanently disabled may receive a discount on the assessed value of their property.

New Jersey: Veterans in the Garden State may be eligible for a $6,000 state income tax exemption. Spouses (or civil union partners) filing a joint return with a qualifying veteran may also qualify for an exemption.

Veterans may qualify for an annual $250 property tax deduction; veterans who are permanently and totally disabled may be fully exempt from property taxes on their primary home.

New Mexico: Property owned by a veteran or surviving spouse in New Mexico may be exempt from taxes up to $4,000 of the home’s value.

The property of a veteran with a 100 percent disability rating — including joint or community property of the veteran and the veteran’s spouse — may be exempt from property tax if the disabled veteran occupies the home as their primary residence.

New York: The Empire State offers qualifying veterans three property tax exemptions that provide full or partial tax breaks, depending on when their home was purchased and when a veteran served.

— Source: CPA and tax expert Lisa Greene-Lewis, TurboTax

Fast facts on state taxes:

States typically offer tax benefits only to those honorably discharged or released from active duty under honorable circumstances.
Property tax relief is usually tied to a home’s value and whether it’soften applies only to a primary primary residence.
Surviving spouses often qualify for continued relief.
Many states offer extra tax breaks for disabled veterans. Check your state’s revenue website for details on available benefits and how to apply.

AARP Foundation Tax-Aide

The AARP Foundation Tax-Aide program is the nation’s largest free, volunteer-based tax assistance service. It focuses on people 50 and older as well as those with low to moderate incomes, but Tax‑Aide is open to anyone, free of charge, and no AARP membership is required.

Learn more and find a location near you.

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Veteran Tax Benefits: Tips to Maximize Your Return

An expert explains federal and state tax breaks for retired service members

Federal tax breaks

State tax breaks

AARP Foundation Tax-Aide