Montana Veteran Tax Exemptions 2026

Your VA disability compensation is tax-free in Montana, which means the state does not touch that income when calculating what you owe. Beyond the income side, Montana also offers a property tax reduction program for disabled veterans, with the size of the reduction tied partly to your household income. The benefit can range from a partial cut to a near-complete reduction depending on where you fall. This page lays out both programs clearly so you know what to expect and how to apply.

Does Montana tax VA disability income?

No. Montana 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 Montana.

Montana property tax exemption for disabled veterans

50% to 100% reduction, income-based. Montana Disabled Veterans Property Tax Assistance, based on income.

The property tax reduction in Montana is income-sensitive, so where your household income lands determines how much of your tax bill gets trimmed, and lower-income veterans can see the largest percentage of relief.

What rating do you need in Montana?

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