Alabama Veteran Benefits 2026: Property Tax Exemptions and Military Retired Pay Tax
The state benefits Alabama gives veterans and their surviving spouses: property tax exemptions, how the state taxes military retired pay, and other benefits, each with who qualifies, the amount, how to apply and the official source.
Alabama fully exempts military retired pay and the survivor benefits paid from it from state, county and municipal income tax. A veteran who is permanently and totally disabled, for example from a service-connected disability, gets a full ad valorem exemption on the home and up to 160 adjacent acres, and from October 1, 2026 does not have to recertify each year. A home bought with a VA specially adapted housing grant is exempt for the veteran and the unremarried surviving spouse. Other state benefits include registration-fee-exempt Disabled Veteran plates for ratings of 10% or more, the Alabama G.I. Dependent Scholarship, discounted hunting and fishing licenses, five state veterans homes, and 5- or 10-point state hiring preference. (sources)
Official sources Checked against official sources on November 4, 2026. This page lists only benefits confirmed on an official state or federal page; counties and cities may offer more.
Property tax exemptions for veterans in Alabama
| Benefit | Who qualifies | Amount | How to apply | Source |
|---|---|---|---|---|
| Homestead exemption for permanently and totally disabled homeowners, which covers veterans claiming because of a service-connected disability | A homeowner who owns and occupies the home as a primary residence and is totally and permanently disabled. The source names no specific VA rating percentage; the test is permanent and total disability. There is no income limit, and the owner must own and occupy the home as a primary residence on the first day of the tax year. Under Ala. Acts 2026-598, effective October 1, 2026, veterans claiming because of a service-connected disability are exempt from the annual recertification requirement. | Full exemption from all ad valorem taxes (state, county and school) on the home and up to 160 adjacent acres. This is homestead type H-3 for permanent and total disability, with no income limit. | Apply at the county revenue commissioner, tax assessor or probate office with proof of disability, such as the DOR Physician's Affidavit (form PT-PA-1) or VA disability documentation. Under Ala. Acts 2026-268, an eligible veteran can also get a county certificate letting a lender leave the exempt ad valorem tax out of the debt-to-income calculation for a home loan. | Alabama Department of Veterans Affairs, Alabama Laws Affecting Veterans 2026, Tax Exemptions (Ala. Code §§ 40-9-19(a), 40-9-21) |
| Exemption for a home acquired under Public Law 702 (VA specially adapted housing grant) | A veteran whose home is or was acquired under Public Law 702, 80th Congress (the VA specially adapted housing grant), as amended. The exemption continues for the unremarried surviving spouse while the spouse owns and occupies the home. | Full ad valorem exemption on the home, regardless of its value | Claim it at the county revenue commissioner or tax assessor with proof that the home was acquired with the specially adapted housing grant. | Alabama Department of Veterans Affairs, Alabama Laws Affecting Veterans 2026, Homes of Veterans/Widows Acquired Under PL 702 (Ala. Code § 40-9-20) |
Is military retired pay taxed in Alabama?
| Treatment | Amount or limit | Source |
|---|---|---|
| Fully exempt. Retirement benefits received by anyone retired from the U.S. military, and the survivor benefits derived from them, are exempt from state, county and municipal income tax. VA disability retirement payments and other VA benefits are also exempt, and so is combat-zone pay (Ala. Code § 40-18-3). | No dollar limit: 100% of military retired pay and military survivor benefits are excluded (Ala. Code § 40-18-20). | revenue.alabama.gov |
For the dollars this treatment adds to (or saves on) a retiree’s state tax in 2026, see the military retirement tax by state study; for the pension itself, the military retirement pay calculator.
Other Alabama veteran benefits
Vehicles and license plates
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Disabled Veteran license plate, exempt from state license tax and fees | Alabama-resident veterans with a service-connected disability rating of 10% or more. Veterans rated below 50% are limited to one exemption and one plate. | Exempt from the state privilege or license tax and the registration and issuance fees. Local taxes and fees may still apply. | va.alabama.gov |
| Disabled Veteran plate for veterans with a severe disability or a VA-funded vehicle | A resident veteran whose disability exceeds 50%, who needs special mechanical controls to drive, or whose vehicle was fully or partly paid for by the VA | Registration fee of $5.00 in place of the regular license fee, unless exempt under the 10% rule above, and exempt from the state issuance fee. A vehicle paid for by a VA grant gets one plate exempt from all license fees and ad valorem tax (Ala. Code § 40-12-254). | va.alabama.gov |
| Medal of Honor and Prisoner of War plates, plus the Purple Heart plate | Medal of Honor recipients, former POWs and Purple Heart recipients who are Alabama residents | Medal of Honor and POW: the first plate is exempt from registration fees and ad valorem tax. Purple Heart: the first plate is exempt from registration fees but not from ad valorem tax. | va.alabama.gov |
Hunting, fishing and other licenses
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Disabled veteran special hunting license | Veterans with VA certification of a 100% or 50% service-connected disability | 100% rated: $2 plus the issuance fee. 50% rated: half the usual cost plus the issuance fee. Both can get the annual resident nighttime feral swine and coyote license for the issuance fee only. Veterans rated 40% or more can also buy a lifetime hunting license, with the price set by age 50+ and 100% P&T status. | va.alabama.gov |
| Disabled Military Veteran Appreciation fishing licenses, annual and lifetime | Alabama-resident veterans with a VA disability rating of 20% or more | Discounted annual fishing license, or optional lifetime freshwater and/or saltwater licenses priced by whether the veteran is 50 or older. The guide gives no exact dollar figure. | va.alabama.gov |
Education
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Alabama G.I. Dependent Scholarship Program | Children, stepchildren, spouses and unremarried surviving spouses of veterans who meet the residency requirements and who are rated 40% or more service-connected, were a POW or MIA, or died from a service-connected cause or on active duty. Children and stepchildren must start before their 26th birthday (up to age 30 in certain situations). | Children and stepchildren: up to 5 standard academic years (10 semesters) of undergraduate study, used within 8 years of application. Spouses or unremarried surviving spouses of 100% permanently and totally disabled veterans: 5 years (10 semesters). Spouses of veterans rated 40-90%: 3 years (6 semesters). Tuition is capped at $400 per credit hour each semester, and textbooks plus fees at $1,000 per semester, at qualifying Alabama schools. | va.alabama.gov |
Employment
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Veterans' preference in state classified employment | Honorably discharged veterans and their spouses get 5 points. Veterans with a compensable service-connected disability and their spouses get 10 points. Surviving spouses of service members who died in the line of duty get 10 points. | 5 or 10 points added to earned exam ratings for state classified service, plus priority on the registers over applicants with equal scores (Ala. Code § 36-26-15(b), as amended by Ala. Acts 2026-574, effective January 1, 2027) | va.alabama.gov |
State veterans homes
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| State veterans homes | Eligible veterans needing skilled nursing care or assisted living. Apply through a county veterans service officer or directly to the home. | ADVA operates five state veterans homes offering skilled nursing and some assisted living care. | va.alabama.gov |
Other benefits
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Free admission to state parks | Alabama-resident active-duty members and honorably discharged veterans. Nonresident active and retired military get free admission on state and federal holidays. | Free state park admission on days the park is open to the public | va.alabama.gov |
Common questions
Does Alabama have a property tax exemption for disabled veterans?
Alabama lists 2 veteran property tax benefits. The main one: Homestead exemption for permanently and totally disabled homeowners, which covers veterans claiming because of a service-connected disability. Who qualifies: A homeowner who owns and occupies the home as a primary residence and is totally and permanently disabled. The source names no specific VA rating percentage; the test is permanent and total disability. There is no income limit, and the owner must own and occupy the home as a primary residence on the first day of the tax year. Under Ala. Acts 2026-598, effective October 1, 2026, veterans claiming because of a service-connected disability are exempt from the annual recertification requirement.. Amount: Full exemption from all ad valorem taxes (state, county and school) on the home and up to 160 adjacent acres. This is homestead type H-3 for permanent and total disability, with no income limit. (Alabama Department of Veterans Affairs, Alabama Laws Affecting Veterans 2026, Tax Exemptions (Ala. Code §§ 40-9-19(a), 40-9-21)).
How do I apply for the Alabama veteran property tax exemption?
Apply at the county revenue commissioner, tax assessor or probate office with proof of disability, such as the DOR Physician's Affidavit (form PT-PA-1) or VA disability documentation. Under Ala. Acts 2026-268, an eligible veteran can also get a county certificate letting a lender leave the exempt ad valorem tax out of the debt-to-income calculation for a home loan. (Alabama Department of Veterans Affairs, Alabama Laws Affecting Veterans 2026, Tax Exemptions (Ala. Code §§ 40-9-19(a), 40-9-21)).
Does Alabama tax military retirement pay?
Fully exempt. Retirement benefits received by anyone retired from the U.S. military, and the survivor benefits derived from them, are exempt from state, county and municipal income tax. VA disability retirement payments and other VA benefits are also exempt, and so is combat-zone pay (Ala. Code § 40-18-3). Amount or limit: No dollar limit: 100% of military retired pay and military survivor benefits are excluded (Ala. Code § 40-18-20). (revenue.alabama.gov).
What other benefits do veterans get in Alabama?
Disabled Veteran license plate, exempt from state license tax and fees (va.alabama.gov); Disabled Veteran plate for veterans with a severe disability or a VA-funded vehicle (va.alabama.gov); Medal of Honor and Prisoner of War plates, plus the Purple Heart plate (va.alabama.gov); Alabama G.I. Dependent Scholarship Program (va.alabama.gov); Disabled veteran special hunting license (va.alabama.gov); Disabled Military Veteran Appreciation fishing licenses, annual and lifetime (va.alabama.gov); State veterans homes (va.alabama.gov); Veterans' preference in state classified employment (va.alabama.gov); Free admission to state parks (va.alabama.gov). Who qualifies and the amounts are in the tables above.
Sources
- Alabama Department of Veterans Affairs, Alabama Laws Affecting Veterans 2026, Tax Exemptions (Ala. Code §§ 40-9-19(a), 40-9-21)
- revenue.alabama.gov
- va.alabama.gov
- va.alabama.gov
Every row above is copied from the official page linked beside it. Benefits change with new laws and local decisions, so confirm the amount and the deadline with the office that runs the program before you apply. QuantCalc is calculation software, not legal, tax or benefits advice. Last updated November 4, 2026.
Related
Alabama senior property tax relief → Alabama state income tax for retirees → Veteran benefits in every state → Military retirement tax by state 2026 → Military retirement pay calculator → 2026 VA disability rates → Military retiree and VA COLA 2027 → VA loan limits 2026 →