Iowa Veteran Tax Exemptions 2026

In Iowa, VA disability compensation is fully exempt from state income tax, so your rating-based pay is not counted as taxable income on your state return. Iowa also provides a complete property tax exemption for veterans who hold a 100% permanent and total rating, covering the primary residence. That combination makes a real difference in the annual cost of living for veterans who qualify. This page covers what the state requires and how to get the exemption applied to your tax bill.

Does Iowa tax VA disability income?

No. Iowa 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 Iowa.

Iowa property tax exemption for disabled veterans

Full exemption at 100% P&T. 100% P&T vets get a full property tax exemption.

A 100% P&T rating in Iowa can erase the property tax on your home entirely, making it one of the more impactful benefits the state extends to disabled veterans.

What rating do you need in Iowa?

The size of your break depends on your combined VA rating. In Iowa, the full break is reserved for veterans at the top rating, usually 100 percent or 100 percent Permanent and Total. Lower ratings may still qualify for a smaller break, so it is worth checking with your county even if you are not yet at 100 percent. 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 Iowa 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 Iowa 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 Iowa Department of Veterans Affairs before you rely on them. Rules and dollar amounts change year to year.