Hawaii fully exempts military retirement pay from state income tax, and totally disabled veterans who own their home pay no property taxes at all — the state exempts real property owned and occupied by a totally disabled veteran from all county property taxes except the minimum tax. These are the headline benefits, and they’re meaningful. But Hawaii’s veteran benefit picture is complicated by one unavoidable reality: the cost of living in Hawaii is among the highest in the nation, which both makes these tax savings more valuable and means veterans should carefully weigh whether the state’s overall financial environment works for their retirement plans.
Hawaii’s military presence is extensive — Pearl Harbor, Joint Base Pearl Harbor-Hickam, Schofield Barracks, Marine Corps Base Hawaii (Kaneohe Bay), and Pohakuloa Training Area on the Big Island are among the major installations. The state’s veteran population of roughly 100,000 represents a tight-knit community with strong connections to Pacific-area military operations and a rich military history.
USMilitary.org is an independent educational resource, not affiliated with the Hawaii Office of Veterans’ Services, the VA, or any government agency. For official information, visit dod.hawaii.gov/ovs.
- Military retirement pay and SBP payments are fully exempt from Hawaii state income tax
- Totally disabled veterans have their primary residence exempt from all property taxes (except the county minimum tax) — and this extends to their unremarried surviving spouse
- Property tax exemptions and rates vary by county (Honolulu, Maui, Kauai, Hawaii County) — each county has its own forms, rates, and deadlines
- The Hawaii National Guard State Tuition Assistance Program (STAP) covers 100% of tuition at state community colleges and 50% at four-year UH campuses, subject to funding availability
- Hawaii operates the Yukio Okutsu State Veterans Home in Hilo — the only state veterans nursing home in Hawaii
- 100% disabled veterans receive a $45 discount on vehicle registration fees and access to specially designed veteran license plates
Table of Contents
- Income Tax Benefits
- Property Tax Exemptions
- Education Benefits
- Employment Preferences
- State Veterans Home
- Vehicle and License Benefits
- Surviving Spouse Benefits
- Major Military Installations
- How to Access Hawaii Veteran Benefits
- Frequently Asked Questions
Income Tax Benefits
Military Retirement Pay — Fully Exempt
Hawaii does not tax military retirement pay. This exemption applies to retired pay from all branches of the U.S. Armed Forces. Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RCSBP), and Retired Serviceman’s Family Protection Plan (RSFPP) annuities are also exempt from Hawaii state income tax.
National Guard and Reserve Drill Pay — Partial Exemption
Hawaii National Guard and U.S. Armed Forces Reserve drill pay is exempt from state income tax up to the amount that an E-5 with eight years of service receives for 48 drills (equivalent to 12 weekends) and 15 days of annual training. Pay above that threshold is taxable.
Active Duty Pay
Active duty pay for Hawaii residents generally follows federal tax rules — combat zone pay is exempt from Hawaii income taxes. Nonresident service members stationed in Hawaii on military orders do not owe Hawaii income tax on their military pay. Under the Military Spouse Residency Relief Act (MSRRA), spouses who maintain a different home state domicile may be exempt from Hawaii income tax on wages earned here.
Hawaii has one of the highest state income tax rates in the country (up to 11% on higher incomes), so the full exemption on retirement pay is a genuinely significant benefit for retirees who might otherwise face a large state tax bill. For context on overall military compensation, see our 2026 Military Pay Charts.
Property Tax Exemptions
Hawaii’s property tax system is administered by four county governments — City and County of Honolulu, County of Maui, County of Kauai, and County of Hawaii (Big Island). Each county has its own assessment rates, exemption amounts, application forms, and deadlines. This means a disabled veteran on Oahu and one on Maui may have somewhat different experiences navigating the system, though the core benefit — full exemption for totally disabled veterans — is consistent statewide.
Totally Disabled Veterans — Full Exemption
Real property owned and occupied as a home by a totally disabled veteran is exempt from all county property taxes, except for the minimum tax (a nominal amount assessed on all properties). This exemption applies when the disability is the result of injuries received while on active duty in the U.S. Armed Forces. Veterans must provide proof of honorable discharge and VA certification of total disability.
Honolulu veterans file using Form E-8-10.5 with the City and County of Honolulu Real Property Assessment Division. Veterans in other counties should contact the relevant county assessment office for the appropriate forms and deadlines.
Disabled Veteran Exemptions Below 100%
Each of Hawaii’s four counties has its own exemption structure for veterans with disability ratings below 100%. These vary significantly by county. Contact your county’s real property tax or assessment office for the current exemption schedule applicable to your disability rating:
- City and County of Honolulu: (808) 768-3799 or realproperty.honolulu.gov
- County of Maui: (808) 270-7697
- County of Kauai: (808) 241-4224
- County of Hawaii (Big Island): (808) 961-8201
Hawaii veterans considering a home purchase should also explore VA loans — no down payment required, no private mortgage insurance. See our VA Loan Guide for details on eligibility and how the program works in high-cost markets like Hawaii.
Education Benefits
Hawaii National Guard State Tuition Assistance Program (STAP)
The Hawaii National Guard State Tuition Assistance Program provides tuition waivers to eligible Guard members who have completed Basic Combat Training and Advanced Individual Training (AIT). Subject to available funding, STAP covers:
- 100% of tuition at a University of Hawaii community college campus
- 50% of tuition at a four-year University of Hawaii campus
To be eligible, members must be in pay grades E1-E9, W1-W5, or O1-O3, and must be a University of Hawaii resident for tuition purposes. As funding-dependent, STAP benefits can vary year to year — Guard members should contact their unit’s Education Services Officer for current program status and application procedures.
In-State Tuition for Veterans and Service Members
Nonresident veterans and service members stationed in Hawaii on military orders, as well as their dependents, are eligible to attend University of Hawaii system institutions at the resident tuition rate. Veterans who relocate to Hawaii after service can establish residency for tuition purposes through the standard process, which typically requires 12 months of Hawaii residency and demonstrated intent to remain.
Kupono Diploma Program for Wartime Veterans
Hawaii offers the Kupono Diploma Program, which grants honorary high school diplomas to veterans of WWII, the Korean War, and the Vietnam era who left high school early to serve in the military. This program is administered by the Hawaii Department of Education and is primarily a recognition program for older veterans who sacrificed their education to serve their country.
Employment Preferences
Hawaii provides veterans preference in state civil service hiring. Qualifying veterans receive additional points on civil service examinations and preference in initial appointment decisions. Categories include:
- 5-point preference: Honorably discharged veterans with qualifying service
- 10-point preference: Veterans with a service-connected disability rating
- 10-point derived preference: Spouses, surviving spouses, and mothers of qualifying disabled or deceased veterans
The Hawaii Office of Veterans’ Services (OVS) provides advocacy and assistance helping veterans navigate employment preference claims and other state benefit applications. All OVS services are provided free of charge.
State Veterans Home
The Yukio Okutsu State Veterans Home in Hilo (Hawaii County, Big Island) is Hawaii’s only state-operated veterans nursing facility. It provides skilled nursing care for eligible veterans who require long-term residential care.
Eligibility requirements:
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- Honorably discharged from the U.S. Armed Forces
- Hawaii resident
- Medical need for skilled nursing care
The home is affiliated with the VA’s State Home program, which provides per diem payments to help offset costs for eligible veterans. Contact the Yukio Okutsu State Veterans Home at (808) 961-1500 for current availability, wait times, and admissions information. Veterans on Oahu or the neighbor islands requiring nursing care may also access VA Community Living Centers and VA-contracted community nursing homes through their VA healthcare network.
Vehicle and License Benefits
- Vehicle registration fee discount: Veterans with a 100% service-connected VA disability rating receive a $45 discount on their annual state vehicle registration fee (the standard fee minus $45). For example, a registration fee of $245 would be reduced to $200.
- Specialty veteran license plates: Hawaii offers distinctive veteran and disabled veteran license plates at the same cost as standard plates. Qualified veterans can choose from multiple plate designs recognizing their branch of service and veteran status.
- County-specific vehicle benefits: Some counties may offer additional vehicle-related exemptions for disabled veterans — check with your county’s vehicle registration office for current programs.
Surviving Spouse Benefits
Hawaii extends several key benefits to unremarried surviving spouses of qualifying veterans:
- Property tax exemption: The full property tax exemption for totally disabled veterans transfers to the unremarried surviving spouse of a qualifying veteran
- SBP payments: Fully exempt from Hawaii state income tax
- Employment preference: 10-point derived preference is available to surviving spouses of veterans who died in service or from a service-connected cause
- VA healthcare: Surviving spouses receiving Dependency and Indemnity Compensation (DIC) may be eligible for CHAMPVA healthcare coverage through the VA
Major Military Installations
Hawaii hosts one of the most significant concentrations of military power in the U.S. Pacific, creating extensive federal resources and VA infrastructure across the islands:
- Joint Base Pearl Harbor-Hickam (Oahu) — Combines the historic naval base with Hickam Air Force Base; home to U.S. Pacific Fleet headquarters and Pacific Air Forces
- Schofield Barracks (Oahu) — Home of the 25th Infantry Division (“Tropic Lightning”); one of the largest Army installations in the Pacific
- Marine Corps Base Hawaii (Kaneohe Bay, Oahu) — Home of the 3rd Marine Regiment and Marine Corps aviation assets
- Pohakuloa Training Area (Big Island) — The Army’s largest training area in the Pacific; used by both active duty and Reserve/Guard units
- Fort Shafter (Oahu) — Headquarters of U.S. Army Pacific (USARPAC)
- Tripler Army Medical Center (Oahu) — The primary military medical facility in the Pacific; serves active duty, retirees, and their families across the theater
VA healthcare is available through the VA Pacific Islands Health Care System, which operates the main VA facility on Oahu along with community-based outpatient clinics on Maui, Hilo, Kona, and Kauai.
How to Access Hawaii Veteran Benefits
The Hawaii Office of Veterans’ Services (OVS) is the primary state agency for veteran advocacy and benefits assistance. OVS staff can help veterans and families navigate federal and state programs, including property tax exemptions, education benefits, and veterans home admissions — all at no charge.
Key contacts:
- Hawaii OVS — main state benefits portal; (808) 433-0420
- County property tax offices (listed above) — for property tax exemption applications and deadlines
- University of Hawaii System — veteran tuition and in-state status questions
- VA Pacific Islands Health Care System
- Yukio Okutsu State Veterans Home — (808) 961-1500
Browse all state guides at our Veteran Benefits by State directory, or explore our VA Loan Guide for homebuying resources specific to high-cost markets.
Frequently Asked Questions
No. Military retirement pay is fully exempt from Hawaii state income tax. SBP payments are also exempt. This is significant given Hawaii’s high income tax rates — retirees with substantial retirement pay avoid what could otherwise be a large annual tax bill.
Totally disabled veterans whose disability resulted from active duty service pay no county property taxes on their primary residence — only a nominal minimum tax assessed on all properties. Below 100% disability, exemptions vary by county. Contact your county’s real property assessment office for the specific exemption available at your rating level.
No. Hawaii’s property taxes are administered by four separate county governments. While the core benefit (total exemption for totally disabled veterans) is consistent statewide, the process, forms, and deadlines differ by county. Oahu veterans apply through the City and County of Honolulu; veterans on other islands apply through their respective county offices.
Yes — the Yukio Okutsu State Veterans Home in Hilo on the Big Island. It is the only state-operated veterans nursing facility in Hawaii. Veterans on Oahu or other islands may also access VA community nursing home options through the VA Pacific Islands Health Care System. Call (808) 961-1500 for admissions information.
The Hawaii National Guard State Tuition Assistance Program (STAP) covers 100% of tuition at UH community colleges and 50% at four-year UH campuses, subject to funding availability. Guard members must have completed BCT and AIT and be in pay grades E1-E9, W1-W5, or O1-O3. Contact your unit’s Education Services Officer for current program status and application details.
Yes. Eligible veterans can use VA loans to purchase a home in Hawaii with no down payment and no private mortgage insurance — a particularly valuable benefit in one of the most expensive housing markets in the country. VA loans in high-cost areas like Hawaii can go above the standard conforming loan limit. See our VA Loan Guide and VA Loan Limits by County for Hawaii-specific figures.