VA disability compensation is free of federal income tax, and nearly every state offers property tax relief to disabled veterans — a full exemption in many states for a 100% rating. On the other side of the ledger, gifts to a 501(c)(3) like ours are tax-deductible, and donated property held over a year generally deducts at fair market value.
One guide, two audiences: first what veterans can claim, then what donors can. Tax rules change and everyone’s situation differs — treat this as a map, and consult your tax advisor before acting on any of it.
Part 1: Tax benefits for veterans
VA disability pay is not taxed
Disability compensation from the VA is excluded from federal income tax. You do not report it on your return, and it does not push you into a higher bracket. See current amounts in our 2026 disability pay chart.
State property tax exemptions
Most states reduce or eliminate property taxes for disabled veterans — often a full exemption at a 100% rating (Texas, Florida, New Jersey, and many others), with partial relief at lower ratings. Two things veterans routinely miss:
- You must apply — usually through your county assessor, with your VA rating letter and DD-214.
- Some states have deadlines — Georgia’s window is January 1 to April 1; North Carolina requires filing by June 1.
Every state’s exemption is listed in our state-by-state benefits guide.
State income tax breaks
Eight states — Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — have no state income tax at all. Several others, including New Mexico and South Carolina, do not tax military retirement pay. If a move is on your horizon, the difference can amount to real money every year.
Free help claiming these benefits
Your County Veterans Service Officer files exemption and benefit paperwork with you at no charge, and can review what your state owes you.
Part 2: Tax benefits for donors
Veterans Opportunity Program Inc. is a 501(c)(3) nonprofit (EIN 47-3763471 — verify it in the IRS tax-exempt search). Gifts that fund our benefits guidance, housing placements, adaptive sports, and PTSD retreat programs are tax-deductible to the extent the law allows.
Cash gifts
Cash donations are deductible if you itemize. You receive a written acknowledgment from us for your records — keep it with your return.
Property gifts: often the biggest tax benefit
Donating appreciated property — land, a house, a vehicle — can beat selling it, twice over:
- Fair-market-value deduction. Property held more than one year generally deducts at what it is worth today, not what you paid for it.
- No capital gains tax on the appreciation. Donate instead of selling and the gain is never realized, so it is never taxed.
The IRS mechanics: a qualified appraisal is required for property donations over $5,000; noncash gifts over $500 are reported on IRS Form 8283, which we sign; and deductions for appreciated property are generally limited to 30% of your adjusted gross income per year, with unused amounts carried forward up to five more years. Your tax advisor confirms the numbers for your return — we never estimate your savings for you.
Ready to explore it? Our property donation page explains the process — we handle the deed or title work at our cost, and every property gets a free review with a straight answer within one business day. For vacant land specifically, our land-donation program’s detailed guide at DonateLand.com walks through exactly how the deduction is calculated.
Keep the paperwork
Whatever you give, keep the acknowledgment letter, Form 8283 (for noncash gifts over $500), the appraisal (over $5,000), and transfer documents with your tax records. Clean paperwork is what makes the deduction stick.
This page is general information, not tax advice. Tax law changes and individual situations vary — always consult your tax advisor or CPA before making decisions based on tax benefits.
Common questions
Is VA disability pay taxable?
No. VA disability compensation is not subject to federal income tax and you do not report it as income. Military retirement pay is different — it is federally taxable, though several states exempt it. Your tax advisor can confirm how your mix of benefits is treated.
Do property tax exemptions happen automatically?
No — you must apply, usually through your county assessor with your VA rating letter and DD-214. Some states have strict windows: Georgia takes applications January 1 through April 1, and North Carolina requires filing by June 1. A County Veterans Service Officer can file the paperwork with you for free.
How large is the deduction for donated property?
Property held more than one year generally deducts at fair market value — what it is worth today, not what you paid. Donations over $5,000 require a qualified appraisal, and noncash gifts over $500 are reported on IRS Form 8283, which we sign. Deductions for appreciated property are generally limited to 30% of your adjusted gross income per year, with a five-year carryforward. Consult your tax advisor for how this applies to your return.
What paperwork do I get when I donate?
A written acknowledgment from us for any gift, plus a signed IRS Form 8283 for noncash gifts over $500. For property over $5,000 you will also need a qualified appraisal. Keep everything with your tax records — your preparer will want all of it.
How do I verify you are a real 501(c)(3)?
Search our EIN, 47-3763471, in the IRS Tax Exempt Organization Search at apps.irs.gov/app/eos. Veterans Opportunity Program Inc. is a registered 501(c)(3), and donations are tax-deductible to the extent the law allows.