New Jersey Veteran Tax Exemptions 2026

Your VA disability compensation is fully exempt from New Jersey state income tax, which can make a meaningful difference on your annual return. The state goes a step further for veterans who reach the highest disability rating, offering a full property tax exemption that can eliminate the bill on your primary home. This page covers both benefits and the steps to claim them.

Does New Jersey tax VA disability income?

No. New Jersey 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 New Jersey.

New Jersey property tax exemption for disabled veterans

Full exemption at 100% P&T. 100% P&T vets are fully exempt from property tax.

For veterans who reach the qualifying rating, this exemption can wipe out the property tax on your home entirely, a benefit that's worth claiming as soon as you're eligible.

What rating do you need in New Jersey?

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