Illinois Veteran Benefits 2026: Property Tax Exemptions and Military Retired Pay Tax
The state benefits Illinois 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.
Illinois reduces the taxable value of a disabled veteran's home by rating. A 30-49% rating takes $2,500 off the equalized assessed value (EAV), 50-69% takes $5,000 off, and 70% or more exempts the first $250,000 of EAV. Unremarried surviving spouses can keep the exemption, and housing adapted with VA funds can get up to $100,000 off its assessed value. Military retired pay is fully subtracted from Illinois income tax. Other state benefits include free tuition at public colleges through the Illinois Veteran Grant, free hunting and fishing licenses for veterans with a 10% or higher rating, free disabled-veteran plates and five state veterans' homes. (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 Illinois
| Benefit | Who qualifies | Amount | How to apply | Source |
|---|---|---|---|---|
| Standard Homestead Exemption for Veterans with Disabilities (SHEVD), 35 ILCS 200/15-169 | Veteran with a service-connected disability certified by the U.S. Department of Veterans Affairs who owns or leases a single-family residence as primary residence and is liable for its property taxes. Rating tiers: 30% to <50%, 50% to <70%, 70% or more. For tax years 2024 and later, World War II veterans qualify regardless of disability level. No income limit. | 30-49%: $2,500 EAV reduction; 50-69%: $5,000 EAV reduction; 70%+: the first $250,000 of EAV of the residence is exempt; WWII veterans (tax year 2024+): property exempt regardless of rating | File Form PTAX-342 (Application for the Standard Homestead Exemption for Veterans with Disabilities) with the Chief County Assessment Office, with VA disability certification. In a single tax year it cannot be combined with the Specially-Adapted Housing exemption (15-165) or the Homestead Exemption for Persons with Disabilities (15-168). | Illinois Department of Revenue |
| SHEVD surviving spouse continuation | Un-remarried surviving spouse of a disabled veteran who had been granted SHEVD; from tax year 2015, un-remarried surviving spouse of a veteran killed in the line of duty; from tax year 2023, un-remarried surviving spouse receiving VA dependency and indemnity compensation (DIC) for a service-connected death. The last two groups qualify even if the veteran never held SHEVD. | Continues the veteran's exemption on the home, or transfers it to another primary residence after the original home is sold; line-of-duty surviving spouses get a 100% EAV reduction on their primary residence | File Form PTAX-342 with the Chief County Assessment Office | Illinois Department of Revenue |
| Veterans with Disabilities Exemption for Specially-Adapted Housing, 35 ILCS 200/15-165 | Veteran with a disability whose housing was bought, built or adapted with federal (VA specially adapted housing) funds, including donated housing (from tax year 2015) and qualifying mobile homes; continues while the veteran, spouse or unmarried surviving spouse lives there | Up to $100,000 reduction in assessed value | Apply through the Chief County Assessment Office; in a single tax year it cannot be combined with the Persons with Disabilities exemption (15-168) or SHEVD (15-169) | Illinois Department of Revenue |
| Returning Veterans' Homestead Exemption (RVHE), 35 ILCS 200/15-167 | Veteran returning from active duty in an armed conflict involving U.S. armed forces who owns and occupies the property as principal residence on January 1 (a home bought after January 1 of the return year qualifies the following year) | $5,000 EAV reduction for the tax year of return and the following tax year (two consecutive years) | File Form PTAX-341 with the Chief County Assessment Office | Illinois Department of Revenue |
Is military retired pay taxed in Illinois?
| Treatment | Amount or limit | Source |
|---|---|---|
| Fully exempt. Federally taxed government retirement and government disability pay, 'including military plans', is subtracted on Form IL-1040, Line 5. | No dollar cap. The full federally taxed amount is subtracted (2025 IL-1040 instructions / Publication 120). | tax.illinois.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 Illinois veteran benefits
Vehicles and license plates
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Disabled Veteran license plates | Veteran with a VA service-connected disability for whom a licensed physician certifies eligibility for a disabled placard or plate | First set of plates issued at no cost (IDVA Benefits Guide 2025) | veterans.illinois.gov |
Hunting, fishing and other licenses
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Free fishing and hunting licenses for disabled veterans | Veterans receiving service-connected compensation at 10% or more, or a total disability pension | Free licenses, obtained from IDVA with disability documentation no more than 1 year old (IDVA Benefits Guide 2025) | veterans.illinois.gov |
| Half-price hunting, fishing and sportsmen's combination licenses for veterans | Illinois resident veterans who served abroad (and Guard/Reserve members mobilized by the President); DD-214 and photo ID required; non-residents ineligible | 50% off the resident fee | dnr.illinois.gov |
Education
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Illinois Veteran Grant (IVG) | Honorably discharged veteran with at least 1 year of active duty, or service in a foreign country during hostilities. Residency: lived in Illinois within 6 months before entering service, or has been a resident for 15 consecutive years after active duty, and returned to Illinois within 6 months of discharge. | Pays tuition and mandatory fees at Illinois state-supported colleges, universities and community colleges | veterans.illinois.gov |
| MIA/POW Scholarship for dependents | Spouse or child of an Illinois veteran who is MIA, a POW, rated 100% permanently and totally disabled from service-connected causes, or died from a service-connected cause | Full tuition and mandatory fees at Illinois state-supported colleges, up to 120 points (about 4 years full time), used within 12 years | veterans.illinois.gov |
Employment
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| State employment preference | Honorably discharged veterans applying for state jobs through Central Management Services (CMS) | Hiring preference (IDVA guide does not state point values) | veterans.illinois.gov |
State veterans homes
| Benefit | Who qualifies | Amount | Source |
|---|---|---|---|
| Illinois Veterans' Homes (Anna, Chicago, LaSalle, Manteno, Quincy) | Illinois veterans needing skilled or domiciliary care; qualifying spouses are accepted at Anna and Quincy | Long-term skilled nursing at all 5 homes; domiciliary (independent) living at Anna and Quincy. IDVA does not publish fees on this page. | veterans.illinois.gov |
Common questions
Does Illinois have a property tax exemption for disabled veterans?
Illinois lists 4 veteran property tax benefits. The main one: Standard Homestead Exemption for Veterans with Disabilities (SHEVD), 35 ILCS 200/15-169. Who qualifies: Veteran with a service-connected disability certified by the U.S. Department of Veterans Affairs who owns or leases a single-family residence as primary residence and is liable for its property taxes. Rating tiers: 30% to <50%, 50% to <70%, 70% or more. For tax years 2024 and later, World War II veterans qualify regardless of disability level. No income limit.. Amount: 30-49%: $2,500 EAV reduction; 50-69%: $5,000 EAV reduction; 70%+: the first $250,000 of EAV of the residence is exempt; WWII veterans (tax year 2024+): property exempt regardless of rating (Illinois Department of Revenue - Property Tax Relief (PIO-74)).
How do I apply for the Illinois veteran property tax exemption?
File Form PTAX-342 (Application for the Standard Homestead Exemption for Veterans with Disabilities) with the Chief County Assessment Office, with VA disability certification. In a single tax year it cannot be combined with the Specially-Adapted Housing exemption (15-165) or the Homestead Exemption for Persons with Disabilities (15-168). (Illinois Department of Revenue - Property Tax Relief (PIO-74)).
Does Illinois tax military retirement pay?
Fully exempt. Federally taxed government retirement and government disability pay, 'including military plans', is subtracted on Form IL-1040, Line 5. Amount or limit: No dollar cap. The full federally taxed amount is subtracted (2025 IL-1040 instructions / Publication 120). (tax.illinois.gov).
What other benefits do veterans get in Illinois?
Illinois Veteran Grant (IVG) (veterans.illinois.gov); MIA/POW Scholarship for dependents (veterans.illinois.gov); Free fishing and hunting licenses for disabled veterans (veterans.illinois.gov); Half-price hunting, fishing and sportsmen's combination licenses for veterans (dnr.illinois.gov); Disabled Veteran license plates (veterans.illinois.gov); Illinois Veterans' Homes (Anna, Chicago, LaSalle, Manteno, Quincy) (veterans.illinois.gov); State employment preference (veterans.illinois.gov). Who qualifies and the amounts are in the tables above.
Sources
- Illinois Department of Revenue - Property Tax Relief (PIO-74)
- tax.illinois.gov
- veterans.illinois.gov
- veterans.illinois.gov
- veterans.illinois.gov
- dnr.illinois.gov
- veterans.illinois.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
Illinois senior property tax relief → Illinois 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 →