NINE LINE: CLICK TO GET HELP NOW

UPCOMING FUNDRAISER: War on the Greens Huntsville • June 16th

What are my Alabama Military and Veterans State Tax Benefits?

Apr 27, 2022 | Finance

Alabama Retired Military Pay Income Tax Exemption:

Military retired pay is exempt from Alabama income tax. (Ala. Code 40-18-20)

Who is eligible for the Alabama Retired Military Pay Income Tax Exemption?

Military retirees that are receiving retirement pay are eligible for the exemption.

Learn more about the Alabama Retired Military Pay Income Tax Exemption

Alabama Income Tax Exemption for Military Combat Pay:

Pay received in a designated combat zone is exempt from Alabama income tax.

Who is eligible for the Alabama Income Tax Exemption for Military Combat Pay?

Service members receiving pay in a combat zone that has been designated by the President of the United States are eligible for the exemption.

Learn more about the Alabama Income Tax Exemption for Military Combat Pay

Alabama Income Tax Exemption for Military Allowances:

Military allowances paid for quarters, subsistence, uniforms, and travel are exempt from Alabama income taxes.

Who is eligible for the Alabama Income Tax Exemption for Military Allowances?

Allowances paid to active duty, National Guard, and active Reserve Service members are exempt.

Learn more about the Alabama Income Tax Exemption for Military Allowances

Alabama State Taxes on U.S. Department of Veterans Affairs Military Disability Retirement Pay:

Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the U.S. Armed Forces should not be included in taxable income. Some of the payments which are considered disability benefits include:

  • Disability compensation and pension payments for disabilities paid to Veterans or their Families
  • Grants for homes designed for wheelchair living
  • Grants for motor vehicles for Veterans who lost their sight or the use of limbs, or
  • Benefits under a dependent-care assistance program.

If you are a military retiree and receive disability benefits from the VA, see IRS Publication 525 for more information.

Learn more about Alabama State Taxes on U.S. Department of Veterans Affairs Military Disability Retirement Pay

Alabama State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation(DIC):

DIC is a tax-free monetary benefit paid to eligible young child hugging a tombstone in a veteran cemetery survivors of Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.

U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation Fact Sheet. DIC is exempt from Alabama Income tax.

Learn more about Alabama State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation

Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Alabama State Tax Benefits:

(Ala. Code 40-18-20) SBP, RCSBP, and RSFPP are exempt from Alabama’s income tax.

Learn more about Military Survivor Benefit Plan (SBP) / Reserve Component Survivor Benefit Plan (RCSBP) / Retired Serviceman’s Family Protection Plan (RSFPP) Alabama State Tax Benefits

Alabama Homestead Tax Exemption for Residents over age 65, Blind or Totally Disabled:

The homesteads of residents of Alabama who are over 65; retired due to permanent and total disability, regardless of age; or blind, regardless of age or whether they are retired; are exempt from all state, county, and city property taxes. A homestead is defined as a single-family owner-occupied home, and the land it is on does not exceed 160 acres. The property owner must own and occupy it as their primary residence on the first day of the tax year that they are applying for.

Alabama Homestead Exemption Chart

Alabama Department of Revenue, Memorandum Clarifying Exemption for Permanently and Totally Disabled

Learn more about the Alabama Homestead Tax Exemption for Residents over age 65, Blind or Totally Disabled

Homes of Veterans or Unremarried Surviving Spouses acquired under a Special Adapted Housing Grant are Exempt from Ad Valorem Taxes:

The home of a Veteran, or their Surviving Spouse, that is acquired through a VA Specially Adapted Housing Grant, regardless of its value, is exempt from all Alabama property taxes.

Who is eligible for Homes of Veterans or Unremarried Surviving Spouses, acquired under a Special Adapted Housing Grant Ad Valorem Tax Exemption?

The home is exempt if it is owned and occupied by the Veteran or their unremarried Surviving Spouse.

Learn more about Homes of Veterans or Unremarried Surviving Spouses, acquired under a Special Adapted Housing Grant, are Exempt from Ad Valorem Taxes

Vehicles Paid for by a U.S. Department of Veterans Affairs Grant are Exempt from all License Fees and Property Taxes:

Vehicles owned by disabled Veterans that are all or partly paid for by the U.S. Department of Veterans Affairs (VA) are exempt from all license fees and property taxes. The vehicle must only be used for the private use of the Veteran.

Who is eligible for License Fees and Property Tax Exemptions for Vehicles Paid for by VA Grant?

Any vehicle owned by a Veteran who was disabled in any U.S. war, conflict, or hostilities against a foreign country and who owns a vehicle paid all or partly by the VA is exempt.

Learn more about Vehicles Paid for by U.S. Department of Veterans Affairs Grant is Exempt from all License Fees and Property Taxes

Education

Education

Where do I Start? That is a question we hear a lot. Well, let us try and help you with that. As a Veteran or a Veteran Dependent, you have access to benefits and resources that others don’t. Accessing Campus: You are going to have to go through the admissions process...

read more
Employment Assistance

Employment Assistance

Resources and Direction A job search can be chaotic and confusing sometimes, and veterans’ employment needs vary. Some of us have jobs lined up when leaving the Service and others don’t start looking until they get out. Whatever the case, there are a few elements that...

read more
Alternative Mental Health Resources

Alternative Mental Health Resources

The VA is not the only source of assistance for veterans. We just want you to know that you can get access to counseling resources or someone to talk to in the community. In Birmingham and the surrounding area, several individuals and organizations are working to help...

read more
Area University & College Veteran Contacts

Area University & College Veteran Contacts

UAB – Veteran Recruitment and Student Services Contact: Walter Stewart Phone: 205-934-8804 Website Samford University – Office of the Registrar Contact: Sandra Wilson Phone: 205-726-2911 Website ​Jefferson State – Financial Assistance Services Contact: Cedric Rodgers...

read more
Healthcare

Healthcare

VA Hacks Appointments To set up or change appointments call: 205-933-8101, ext. 2963 or 1-800-872-0328.​ For appointments with Special Programs contact them directly. ​​​ VAMC Map Click for Details Clinics Red – Primary Care/Walk in Gold – Preventive and Chronic...

read more