Colorado Veteran Tax Exemptions 2026

Colorado gives disabled veterans a property tax exemption that can put a meaningful amount back in your hands each year. The state also offers income tax relief on military retirement pay, so veterans here are protected on more than one front. The exemption is tied to your rating, and it grows as your disability level increases. This page breaks down both benefits clearly so you know what you qualify for and what steps to take.

Does Colorado tax VA disability income?

No. Colorado 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 Colorado.

Colorado property tax exemption for disabled veterans

50% off first $200K assessed value at 100% P&T. Colorado offers a 50% reduction on the first $200K of home value for 100% P&T vets.

Even at a partial rating you start seeing property tax savings, and the benefit scales upward from there, so it is worth applying as soon as you have a rating in hand.

What rating do you need in Colorado?

The size of your break depends on your combined VA rating. In Colorado, 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 Colorado 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 Colorado 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 Colorado Department of Veterans Affairs before you rely on them. Rules and dollar amounts change year to year.