VA Disability Tax Rules in Virginia

VA disability compensation is tax-free at the federal level. Virginia has a state income tax, but VA disability compensation itself is not treated as taxable income.

Virginia income tax treatment

• Virginia imposes a personal income tax.
• VA disability compensation is not subject to federal or Virginia income tax.
• Virginia also has separate military-retirement subtraction rules that are distinct from VA disability compensation.

Property tax exemptions for disabled veterans in Virginia

Virginia law provides a major real estate tax benefit for qualifying disabled veterans.

• Veterans rated by the VA as 100% service-connected, permanent and total (including certain 100%-rate unemployability cases) may qualify.
• The exemption applies to a qualifying principal residence and land limits set by statute.
• Qualifying surviving spouses may remain eligible under state rules.

Applications are filed with the local commissioner of revenue or tax office.

Other veteran-related tax benefits in Virginia

• Virginia may provide local personal property tax relief for eligible disabled veterans depending on locality.
• Some vehicle tax/fee relief programs are available for specific disability categories.

Because local implementation can vary, confirm details with your city/county tax office.

Track your VA income and net worth in one place

Nova helps you see how VA disability income supports your goals by tracking your complete net worth in one dashboard.

Related reading

• VA disability compensation: tax-free income and your net worth
• Military retirement planning
• Financial checkup guide