Tax Deductions for Disabled Veterans

Disabled veterans may qualify for numerous tax credits and deductions.

The United States thanks its disabled veterans for their sacrifice and service to the nation by extending a variety of tax credits and deductions -- some are offered on the federal level, other benefits vary from state to state.

Property Taxes

Many states that levy annual property taxes on residential and investment properties offer tax abatements to disabled veterans who served in the armed forces.

Compensated Work Therapy

The Internal Revenue Service ruled in 2007 that money paid to disabled veterans through the Compensated Work Therapy Program run by the Dept. of Veterans Affairs does not constitute taxable income.

Surviving Spouse Exemptions

Surviving spouses of disabled veterans who remain unmarried are eligible for property tax exemptions on the veteran's place of residence and any property that the veteran owned prior to passing away.

Claim Forms

The Veterans Administration provides tax claim forms and instructions to disabled veterans seeking to take advantage of tax deductions.

California Taxes

Disabled veterans residing in the State of California or owning property in that state are not eligible for property tax exemptions.

References

• Sacramento County CA: Disabled Veterans' Exemption FAQs
• U.S. Dept. of Veterans Affairs: Information for Employers
• Roni Deutch Tax Center: Top 10 Tax Tips for Veterans

Resources

• Disabled World: What Each U.S. State Offers Veterans