VA Disability Tax Rules in Texas

VA disability compensation is tax-free at the federal level, and the IRS does not include it in gross income. Texas has no state personal income tax, so there is no Texas income tax on VA disability compensation.

Texas income tax treatment

• Texas does not levy a personal state income tax.
• VA disability compensation is federally tax-exempt and is not taxed by Texas.

Property tax exemptions for disabled veterans in Texas

Texas offers some of the strongest disabled-veteran property tax benefits in the U.S. through county appraisal districts and Texas Comptroller rules.

• 100% disabled (or IU paid at 100%) veterans may qualify for a full residence homestead exemption (Tax Code §11.131).
• Veterans with lower disability ratings may qualify for a partial exemption based on rating tier.
• Some surviving spouses may continue an exemption if statutory requirements are met.

Because local appraisal districts administer filings, deadlines and forms can vary slightly by county.

Other veteran-related tax benefits in Texas

• Texas may provide additional exemptions for certain veteran-owned property categories through state law.
• Some local fees and taxes may have veteran-related relief depending on county/city rules.

For any situation beyond your primary homestead, check with your county appraisal district or the Texas Comptroller.

Track your VA income and net worth in one place

Your VA disability income might be tax-free, but it still matters for cash flow and long-term wealth planning. Nova helps you track your full net worth—including VA income—across accounts and assets.

Related reading

• VA disability compensation: tax-free income and your net worth
• VA benefits and net worth: complete guide
• Military retirement planning basics