VA Disability Tax Rules in New York

VA disability compensation is tax-free at the federal level. New York has a state income tax, but VA disability compensation itself is generally not taxed as New York income.

New York income tax treatment

• New York imposes a personal income tax.
• VA disability compensation is generally excluded from taxable income.
• Other military income (retired pay, pensions, employment income) may have different treatment.

Property tax exemptions for disabled veterans in New York

New York offers multiple veteran property tax exemption frameworks, which can depend on local adoption:

• Alternative Veterans Exemption
• Eligible Funds Exemption
• Cold War Veterans Exemption

Eligibility, percentages, and local applicability vary by municipality and school district.

Other veteran-related tax benefits in New York

• Some veteran-related vehicle and local tax benefits may be available in qualifying circumstances.
• New York also has military retirement income rules separate from VA disability compensation.

Because local option rules are important in New York, check with your local assessor and the New York State Department of Taxation and Finance.

Track your VA income and net worth in one place

Nova helps you keep VA compensation visible in your monthly plan and long-term net worth tracking.

Related reading

• VA disability compensation: tax-free income and your net worth
• Net worth benchmarks by decade
• What is net worth and why track it?