California Veteran Tax Exemptions 2026

California offers a property tax exemption for disabled veterans that can take a real bite out of your annual bill, and the amount you receive depends on where your rating lands. The state does collect income tax, but VA disability compensation is not subject to it, which is worth knowing when you sit down to file. Between the property and income tax treatments, there are meaningful savings available if you know what to claim and how to claim it, and that is exactly what this page covers.

Does California tax VA disability income?

No. California does not tax VA disability compensation. The state treats it the same way the federal government does, which means it is left off your taxable income entirely. Whether you are rated 10 percent or 100 percent, your VA disability pay is not taxed by California.

California property tax exemption for disabled veterans

Basic and Low-Income exemption available. California Disabled Veterans Exemption: Basic ($175K assessed value, 100% rating). Low-Income ($263K, income-based).

Even veterans below the top rating qualify for a partial property tax reduction, so it is worth filing the exemption claim no matter where you are in the rating scale.

What rating do you need in California?

The size of your break depends on your combined VA rating. In California, the break is tiered, so even a partial rating can lower your property tax bill, and the amount climbs as your rating climbs. Not sure what your combined rating works out to? Run it through our VA disability calculator first, and if you are aiming for the top tier, check whether you qualify for Permanent and Total status.

How to claim your California exemption

1. Confirm your current combined rating and whether it is Permanent and Total. Your VA award letter shows both.
2. Gather your DD-214 and your VA disability award letter. Most California offices ask for both.
3. Contact your county tax assessor for the property tax exemption, and the your state tax agency or Department of Veterans Affairs for the income side.
4. File before your county deadline. Many counties require you to apply once, then renew only if your rating changes.

Always confirm the current figures and deadlines with your county assessor and the California Department of Veterans Affairs before you rely on them. Rules and dollar amounts change year to year.