Veterans Notes: In tax season, how can veterans maximize their tax benefits?
Disabled Veterans can qualify for property tax exemptions at the state level. These breaks, which are usually tied to a specific disability rating, can help a veteran save thousands of dollars.
As a veteran, you may be eligible for certain tax benefits under the tax code. It’s important to file your taxes before this year’s April 18 deadline and be aware of the benefits that apply to you.
Here’s a summary of some of the key tax benefits for military veterans, provided by accountant and tax expert Lisa Greene-Lewis of TurboTax. And don’t forget: Tax advice that applies to civilians can benefit you too.
- Military retirement pay is taxable as federal income tax and is not considered earned income for Social Security tax purposes.
- Premiums for the Survivor Benefit Plan are excluded from taxable income.
- Veterans’ education benefit payments received through the Veterans Administration for education and training are tax-free.
- Disability benefits received from VA, such as disability compensation, pension payments and grants for home modifications, are not taxable.
Money from VA that is not taxed:
- Interest from VA life insurance policies.
- Benefits under a dependent-care assistance program.
- Money paid to a survivor of a member of the armed forces who died after Sept. 10, 2001.
- Payments made under the compensated work therapy program.
Note that if you had a recent increase in your disability rating, or were granted combat-related special compensation, you may be eligible for a tax refund, but this can only be applied to the year VA reassessed your disability level.
- States typically offer tax benefits only to veterans who were honorably discharged or released from active duty under honorable circumstances.
- State benefits usually include exemptions on property taxes, according to value.
- Benefits are often transferred to a spouse or surviving spouse of honorably discharged veterans.
- Many states offer property tax exemptions and other benefits for disabled veterans.
- Military retirement pay may be taxed differently in different states.
- Every state’s revenue website outlines state benefits for veterans and how to apply for them.
Disabled Veterans can qualify for property tax exemptions at the state level. These breaks, which are usually tied to a specific disability rating, can help a veteran save thousands of dollars. You can view a list of all property tax exemptions by state and disability percentage here .
AARP Foundation’s Tax-Aide program offers free tax help to anyone, with a focus on taxpayers who are 50 and older and have low to moderate incomes.
Tax assistance is available through knowledgeable volunteers, either in-person or virtually, by appointment only.
As always please see your local County Veterans Service Officer if you have any questions. You can contact the Wadena VSO at (218) 631-7617 or by email at email@example.com – and as always, have a great week!