Military men and women who are in service or have been honorably discharged are recognized by the US government as having faithfully served the country and are deserving of a variety of benefits.
Many of these benefits are designed to help those who have been wounded physically or gone through some psychological trauma. Other benefits are to help make returning to civilian life a better transition.
The government also offers monetary benefits such as job training, loans, and pension programs to help service members return to be successful in their jobs and businesses.
In This Guide
- Veterans Health Benefits
- Veterans Affairs Benefits - Pension Program
- Veterans Small Business Loan Benefits
- Veterans Benefits for Spouses and Family Members
- Veteran Burial Benefits
- Tax Benefits for Veterans
- Veteran Disability Pension
- Veteran Disability Compensation
- Disabled Veterans Benefits
- Educational and Training Veterans Benefits
Veterans Health Benefits
If you are an American veteran who has received an honorable or general discharge, you can receive a number of health benefits through the Department of Veterans Affairs.
You can apply for health benefits online.
Veterans Medical Benefits and Facilities
If a veteran has what the Department of Veterans Affairs considers a "medical need," the law requires them to provide medical care, whether that means hospital stays or outpatient services. The VA defines medical need as any treatment procedure, supply, or service that a healthcare provider deems necessary according to standard clinical practice. That means if a doctor decides you need a specific medical procedure or if you need to stay in a medical facility, the DVA has to provide it.
Veteran Counseling Service
Life isn't always easy coming home after our troops endure the stresses of deployment. A difficult tour of duty can leave veterans physically and emotionally drained. Often, members of the military come home with the knowledge that they will also have to return for a second deployment.
The VA provides a service called Vet Centers that can serve as a guide for both combat veterans and their families. Vet Centers offer a wide range of counseling, outreach and referral services all over the country.
In specific situations when a veteran suffers from post-traumatic stress disorder, the National Center for PTSD works with you to apply the latest therapeutic resources. Post-traumatic stress can occur after a life-threatening event that can lead to anything from severe nightmares to flashbacks and isolation.
VA has an online resource called AboutFace which allows you to watch videos of veterans explaining the process of realizing they had PTSD, seeking help and receiving treatment.
You can also use the Lifeline for Vets helpline where you call and talk to another veteran who went through a similar situation. The helpline has been in operation for 21 years and has answered over 250,000 calls.
Veterans Affairs Benefits - Pension Program
The Veterans Pension program is a monetary supplement that is provided to help low-income veterans who were active during wartime. Eligible veterans would have served on active duty for at least 90 days with at least one of those days being in wartime. Veterans serving after September 7th, 1980 must have served for 24 months in which they are ordered to active duty. Although, there are some exceptions to that rule.
Like with other types of government pensions, there are other stipulations that make the beneficiary eligible to receive their pension. To qualify for veterans benefits eligibility, the following caveats must be true for a veteran to receive their pension:
- They must be 65 or older,
- They have to be disabled, totally and permanently,
- They must be a patient receiving skilled nursing care in a nursing home,
- They are collecting social security insurance,
- Or they are receiving supplemental security income.
An income limit is set by Congress and your family's annual income must not exceed it for you to be eligible to collect your pension.
Veterans Small Business Loan Benefits
The Small Business Administration often offers discounts to veterans who are seeking business loans. In 2015, there were over 3,000 7(a) business loans awarded to veterans totaling over $1.2 million. A 7(a) loan is typically defined by what disqualifies a business from qualifying, you can read a full list of qualifications on the SBA site.
Veterans not only serve our country during the time that they are deployed; many of them return to put their skills to use in the workforce and in entrepreneurial endeavors that strengthen our economy. The Small Business Administration has several programs and resources designed to help vets achieve their business goals.
The have a long list of resources for starting a business as a veteran such as growing your business, getting financing, mentoring, and training programs. They even have resource centers around the country dedicated to training veterans in particular areas of business.
As a veteran, you might have an advantage when it comes to your business obtaining government contracts. You may also have an advantage if you are a service-disabled veteran that owns a business. In this case, you can take advantage of the Service-Disabled Veteran-Owned Small Business Concern Program. This program requires a portion of government contracts to be awarded only to qualifying vets.
Veteran Job Training Programs
The government also has provisions for veterans who need assistance transitioning back into civilian life by helping them find a job or receive the training to get a job.
You can also take advantage of veterans education benefits if you want to further your vocational education or make yourself more marketable as an employee with on the job training or apprenticeships. On the job, VA training programs involve working as a trainee for a specified amount of time through an employer or union. At the end of the apprenticeship, the veteran would receive journeyman status (certified by the state as a skilled worker or a master at his or her craft) or they might be issued a job certification.
In most cases, veterans receive payment in the form of salary throughout the training period. Some programs involve an increase in payment as your skills improve. Under the post 9/11 G.I. Bill, your payments are issued monthly after you receive certification of hours worked and the amounts can vary from program to program.
Work Therapy Program
If you participate in a work therapy program and receive payments from this program you won't have to pay income taxes on it. For more information about veteran work therapy, take a look at Benefits.gov.
Veterans Benefits for Spouses and Family Members
There are also a variety of veterans death benefits for survivors, dependents, and spouses of veterans. For instance, a deceased veteran with an unmarried spouse and children under 18 are able to access the Survivors Pension, which is a monetary benefit available for low-income family members.
Your survivor benefit amount would be based on the earnings of the deceased. The benefits are generally higher, which means the more they pay into social security. Beneficiaries essentially get a portion of the deceased social security. The percent of that portion is dependent on a number of factors including the beneficiary's age. Here are some examples of what people of different eligibility would receive:
- Widows and widowers of full retirement age would receive 100%.
- Widows and widowers between 60 and retirement age receive between 77.5% and 99%.
- Disabled widows and widowers between age 50 and 59 received 71%.
- Widows and widowers of any age who are caring for children under the age of 16 get 75%.
- A child who is under 18 gets 75%.
Parents of deceased service members are also able to access a similar benefits program called Parents' Dependency and Indemnity Compensation. They also have a set of eligibility scenarios. Dependent parents who are age 62 or older get 82% if they are single and 75% if there are two surviving parents.
Survivor benefits are generally based on the earnings of the deceased.
Benefits are awarded to a limited number of family members and that limit varies. It is generally between 150% and 180% of the basic benefit.
Veteran Burial Benefits
The VA also offers veterans burial benefits to help families cover the funeral costs of deceased servicemembers. As of two years ago, the VA actually changed its regulations to streamline the process to deliver the needed benefits more easily. Eligible surviving spouses are generally paid the maximum amount allowed by law.
Burial benefits for a service member's memorial and burial when their death is not connected to military service is $2000 and $300 for a death that is connected to service.
To be eligible for veteran death benefits you need to meet certain qualifications. All of the following qualifications must be met:
- You have to have paid for a veteran's memorial,
- You haven't yet been reimbursed by another government agency or any other source,
- The veteran was not dishonorably discharged.
Only one of the following factors must be true:
- The veteran died because of a disability related to service in the military.
- The veteran was collecting pension or compensation from veterans affairs at his or her time of death.
- The veteran could have received pension but chose to forgo benefits,
- The veteran died in a VA hospital or under VA care,
- The veteran died on the way to receive VA care,
- The veteran had applied to receive pension or compensation and died before he or she was approved.
- The veteran died in a VA nursing home after October 9, 1996.
Tax Benefits for Veterans
The government provides ample benefits for veterans including tax incentives you can take advantage of to lower your tax liability. A great way to achieve this is by understanding specific components such as how you qualify for tax benefits, which types of compensation you can exclude from your gross income and which family members might be eligible for veteran tax benefits. This guide will cover them all to provide you with the information you need.
Veteran Tax Benefit and Eligibility
To qualify for veteran tax benefits you must have served in the Army, Navy, Coast Guard, Marines, Air Force or commissioned services, and served on active duty for 24 consecutive months. Moreover, if you receive a "dishonorable" discharge from service, it excludes you from these benefits.
You can also take advantage of these benefits if you are a spouse, parent or child of a veteran who's disabled or deceased. If you determine you are eligible to receive veteran benefits, here are a few tips to assist you.
Free Tax Services
The IRS provides allotted resources to allow you to file your taxes for free annually. One way it accomplishes this is by offering certified volunteers, who assist you in filing taxes-normally this service is for people 60 years of age and older. You can find a VITA site near you by using the locator tool on the IRS's website. You can also IRS free file to complete your tax returns.
Eligibility for Deductions
Your veteran status doesn't exclude you from taking advantage of normal deductions allotted to everyone. To illustrate, if you or a loved one is a disabled veteran on a limited income you might qualify for the Earned Income Tax Credit. The IRS's website, a trusted an accountant or using the VITA are great ways to check for all deductions you're eligible for.
Keep Diligent Records
If you plan to take advantage of veteran benefits, you'll need to supply documentation that proves your status. To make things easier, keep all records in a secure place, and make copies to supply with tax returns.
Reporting Tax Liability
Since tax doesn't come out on your military pay, it's important to track the liability that way when you file you don't owe more money. The IRS recommends veterans complete form W-4P, as this tells the Defense Finance & Accounting Service the amount of tax you want to be withheld from your retirement compensation.
There are tax exclusions you might qualify for thanks to your veteran status. Here is a closer look at some the exclusions and the qualifications for each.
Veteran Disability Pension
If you are a wartime veteran, who is 65 years of age and older and are permanently disabled-not due to service-related injuries, you might qualify for the Aid and Attendance benefit. This is an additional payment exempt from taxes for veterans and survivors. To qualify:
- You require personal assistance in regular daily functions such as feeding, dressing, and bathing.
- You are a nursing home patient due to your mental or physical condition.
- You are bed confined.
- Your corrected visual acuity is 5/200 or less.
Veteran Disability Compensation
If you are disabled during service or the VA determines it was the result of military service, you might qualify for financial assistance. If you receive disability compensation it is tax-free both on the federal and state level. Moreover, you might be able to claim a tax refund on these occasions:
- You receive Combat-Related Special Compensation after earning concurrent retirement and disability.
- You receive an increase in veteran disability compensation; this would include any retroactive amounts ordered by the VA.
Disabled Veterans Benefits
Veterans Affairs awards compensation to veterans who are disabled in the line of duty or if they become disabled because of service-related causes. To receive these benefits, you need to have been in active service and not been dishonorably discharged. If you are found to be eligible you can receive one of the following benefits:
- Service-related disability compensation,
- VA pension
- Retirement and disability payments
- Combat-related special compensation, typically for people who retire after 20 years of service
- VA health care
- VA nursing home care
Educational and Training Veterans Benefits
The Post-911 GI Bill allows veterans to finance the expense of their undergraduate and graduate degree programs. To qualify for this aid, you must serve a total of 36 months after September 11, 2001. However, if a military branch discharged you due to a disability incurred during service, you qualify after serving 30 days. The amount of aid you receive depends on the amount of time served, with longer time earning more benefits. The benefits you receive are not taxable, so you don't have to add this to your income on your tax returns.
If you are a surviving loved one of a service member, you could receive benefits from the VA, which include the following:
- A one-time death payment of $100,000 paid to surviving family members with financial hardships resulting from the passing of a service member.
- If you are a low-income spouse or dependent of a deceased veteran, you could receive pension payments.
- The VA's Dependency and Indemnity Compensation payment, which is a monthly payment made to surviving spouses with dependent children.
In all three cases, you don't have to pay taxes on these benefits.
Find out more information about Veteran Education and Training here.
Housing Grants & Mortgage for Veterans
Veterans Affairs is committed to helping eligible service members become homeowners. As a part of this, they offer to guarantee a home loan to qualifying individuals and families that are looking to buy, build, adapt or repair a home. VA works with private lenders to provide loans with favorable terms. VA also will guarantee a portion of the loan.
To qualify for this you must have good credit, enough income and a certificate of eligibility, which proves to the lender that you are a VA-backed borrower.
If you are a disabled veteran needing to modify your home, such as installing a wheelchair ramp, to meet your needs, you could qualify for the Specially Adapted Housing Grant. The maximum benefit for this is currently $67,555. The VA has more information on qualification requirements on its website. Any benefit you receive from this grant is not subject to tax.
Veteran Benefits That Are Taxable
Now that we covered a list of the benefits you won't have to pay income tax on, let's take a closer look at the veteran benefits subjected to income tax.
Generally, once you serve on active duty for 20 years, you qualify for retirement pay. This pay is subjected to income tax. There are exclusions that qualify for tax-free income such as disability retirement pay.
If you suffer an injury during active duty, there's the election to receive a lump sum severance payment once upon the military discharging you from service. This severance payment does count as income and will be subject to tax in the year you receive compensation.
Health Care Services
The VA offers special health care programs to assist your medical needs. This differs from getting private health insurance through the marketplace. If you decide to use the VA's coverage you won't receive tax credits as you would if you enrolled in a plan through the marketplace.
More Services Veterans Can Save On
The United Services Automobile Association (the USAA), offers a diversified range of financial services and products to the military community and their immediate families. With the USAA, veterans and their families can rely on them to offer insurance programs, life counseling, membership benefits, financial assistance, and more.
A number of companies offer discounts for active military members, veterans, and their families, just by providing their military ID. Many cell phone carriers also offer exclusive deals and discounts for military veterans. Verizon and AT&T also offer discounts on FiOS Internet & TV and U-Verse services respectively.
Read More: You can check out the full list of 100 military discounts we've collected here.
Veterans Benefits Recap
Overall, as a veteran, you could qualify for ample benefits.
Not only can this assist you in reducing your tax liability, it also could help you find the financial and health resources you need. The best place to turn to learn more about all the resources available to you is the eBenefits website, a joint partnership of the Department of Veteran Affairs and the Department of Defense.
This website provides a wealth of information on programs that could benefit you. Since each state manages its VA's benefits, you can find out more about the benefits you qualify for by visiting the VA's website.