Indiana Veteran Benefits 2026: Complete State Guide

• Indiana Income Tax Benefits for Veterans and Service Members
• Disabled Veteran Property Tax Benefits (New Rules for 2026)
• Education Benefits
• Employment Benefits
• Driver’s Licenses and License Plates
• Indiana Veterans’ Home
• Indiana Veterans Memorial Cemetery
• Hunting, Fishing and State Parks
• Surviving Spouse and Family Benefits
• VA Health Care in Indiana
• How to Claim Indiana Veteran Benefits, Step by Step
• Frequently Asked Questions

Indiana is one of the more tax-friendly Midwest states for the military: retired pay, active-duty pay and survivor annuities are all off the state income tax. The bigger news for 2026 is property tax. The legislature rewrote the disabled veteran property tax benefits this year, and much of what you’ll find online — including the $24,960 and $14,000 deduction figures — no longer applies. This guide covers the new rules, the tuition exemption for veterans’ children, and the rest of Indiana’s state benefits, with who qualifies and how to apply.

Indiana Income Tax Benefits for Veterans and Service Members

Military Retired Pay: Fully Exempt

Indiana does not tax military retired pay. Military survivor annuities — the Survivor Benefit Plan (SBP), Reserve Component SBP and the Retired Serviceman’s Family Protection Plan — are exempt as well. Indiana also doesn’t tax Social Security, which matters for retirees drawing both.

Active-Duty, Guard and Reserve Pay

Indiana residents serving in an active or reserve component of the U.S. Armed Forces don’t pay Indiana income tax on their military pay. If you’re serving outside the U.S. and Puerto Rico, you get an automatic 60-day extension to file, and service members in a combat zone have 180 days after redeployment.

Nonresident military spouses don’t pay Indiana tax on wages earned in Indiana when the service member is stationed there on orders and both spouses keep the same state of residence elsewhere. Claim it on Schedule IN-2058SP; you may still owe tax to your home state.

VA Disability, Military Disability Retirement and DIC

VA disability compensation, Dependency and Indemnity Compensation, and VA grants for adapted homes and vehicles aren’t taxable income, so Indiana doesn’t tax them either. Military disability retirement paid for an injury or sickness from active service is also excluded. If you think your rating is too low, our VA disability ratings guide explains how VA combines conditions — and in Indiana, a higher rating can change which property tax benefit you get.

Disabled Veteran Property Tax Benefits (New Rules for 2026)

House Enrolled Act 1210, passed in 2026, replaced two long-standing deductions with flat credits and turned the third into a full exemption for totally disabled veterans. According to the Indiana Department of Local Government Finance, the changes are retroactive to January 1, 2026 and first apply to the 2026 assessment, which is taxes payable in 2027.

A deduction lowers the assessed value your taxes are figured on; a credit comes straight off the bill. How the $350 credit compares with the old $24,960 deduction depends on your local tax rate, so check your 2027 bill. Totally disabled veterans come out clearly ahead, because the new deduction covers the home’s entire assessed value.

Totally Disabled Veterans: 100% Deduction

If you have a total disability rating, the deduction now equals the full assessed value of your home — real property, a mobile home or a manufactured home. To qualify, you must:

• Have served at least 90 days and received an honorable discharge
• Have a total disability rating
• Own the home (or be buying it under a recorded contract) and live in it as your principal residence
• Have lived in Indiana for at least one year before the assessment date

The old $240,000 assessed-value limit is gone. Two catches: property held in a trust can no longer claim this deduction, and you can’t combine it with the $350 or $250 credit. For a mobile or manufactured home not assessed as real property, total deductions can’t exceed half its assessed value.

Wartime Veterans with a 10% Rating: $350 Credit

Honorably discharged veterans who served during a wartime period and have a service-connected disability rating of at least 10% get a $350 credit, provided they own or are buying the property. A surviving spouse qualifies if the veteran met the requirements at death and the spouse owns the property when filing.

You have to apply for this credit; it isn’t automatic. The state has recommended that counties move people who had the $24,960 deduction onto the credit, and some counties are doing that and notifying owners by mail, but don’t count on it — check with your county auditor.

Veterans 62 and Older: $250 Credit

Veterans who served at least 90 days, received an honorable discharge, are 62 or older and have a disability rating of at least 10% get a $250 credit. A surviving spouse can claim it if the veteran met the requirements at death, or if the service member was killed in action or died on active duty or inactive duty training.

For the 2026 assessment only, anyone who had the old $14,000 deduction is moved to the $250 credit automatically. If you’re totally disabled, apply for the 100% deduction anyway; the auditor applies it instead when you qualify.

The $350 and $250 credits can be stacked with each other and with Indiana’s Over 65 and Blind/Disabled credits. Unused credit isn’t refunded or carried forward.

Homes Given by a Charity

A separate deduction covers a home given to a disabled veteran at no charge by a 501(c)(3) organization. It equals the veteran’s service-connected rating applied to the home’s assessed value — 50% of the value at a 50% rating, up to 100% at 100% — and requires at least 90 days of service, an honorable discharge and a rating of 50% or higher. It doesn’t apply to a home you bought yourself.

Vehicle Excise Tax Credit

Veterans and surviving spouses who qualify for the total disability deduction but don’t own a home can take a credit against vehicle excise tax instead. Ask your county auditor or a BMV branch how it applies to you; the 2026 law changed which deductions feed into this credit.

How to Apply

1. Fill out State Form 12662 (Application for Tax Deduction for Disabled Veterans and Surviving Spouses). The Indiana Department of Veterans Affairs property tax page has the current form.
2. Attach your DD-214 and your VA award letter, or an IDVA Certificate of Eligibility.
3. File with your county auditor, either directly or through your County Veteran Service Officer, by January 15 of the year the taxes are due — January 15, 2027 for taxes payable in 2027.
4. Once approved, you don’t need to reapply each year. If you become ineligible for a credit, notify the auditor within 60 days.

Buying a home with your benefits in mind? A VA loan needs no down payment, and Indiana’s 100% deduction can make property taxes a non-factor for totally disabled veterans.

Education Benefits

Tuition and Fee Exemption for Veterans’ Children

Indiana’s Tuition and Fee Exemption pays tuition and regularly assessed fees at Indiana public colleges and universities for up to 124 credit hours, for undergraduate and professional degrees. Students at an Indiana private nonprofit college can receive up to $5,000 a year instead. It covers:

• Children of disabled or deceased veterans who meet the state’s service requirements
• Children of Purple Heart recipients
• Purple Heart recipients themselves (including certificates and graduate degrees)
• Children and spouses of Indiana National Guard members killed in the line of duty on state active duty
• Former students of the Indiana Soldiers’ and Sailors’ Children’s Home

Apply through ScholarTrack, the Indiana Commission for Higher Education’s online system, and file the FAFSA every year. How much of tuition is covered can depend on when the student first became eligible and the parent’s rating, so confirm the details with IDVA at 317-232-3910 or 800-400-4520 before you plan around it. Guard families should call the Indiana National Guard Education Services Office at 317-964-7023.

National Guard Supplemental Grant

Indiana National Guard members in active drilling status get 100% of tuition and regularly assessed fees at Indiana public colleges, or up to $5,000 a year at a private nonprofit school, for a first associate, bachelor’s or master’s degree. You must file the FAFSA each year, have no AWOL in the prior 12 months, and get approval before each semester starts; other federal and state aid is applied first. Your unit commander starts the application. Former members who used the grant and couldn’t finish because of an overseas deployment after September 10, 2001 can use the Scholarship Extension Program.

In-State Tuition

• Service members and dependents: Indiana National Guard members and service members stationed in Indiana, along with their dependents, can get resident tuition at Indiana public colleges.
• Veterans: nonresident veterans and former Indiana Guard members who enroll within 12 months of an honorable discharge get resident rates, provided they take steps toward Indiana residency within a year, such as registering to vote or getting an Indiana driver’s license.

Apprenticeships, Diplomas and Military Kids

IDVA’s State Approving Agency approves apprenticeships and on-the-job training programs you can pay for with your GI Bill (call 317-234-6062). Veterans who left an Indiana high school to serve in World War I, World War II, Korea or Vietnam can receive a diploma. Indiana is part of the Interstate Compact on Educational Opportunity for Military Children and recognizes Purple Star schools. For the federal side, see our Post-9/11 GI Bill guide.

Employment Benefits

• State hiring preference: veterans with at least 181 days of active duty and an honorable discharge get 10% added to their scores for Indiana state civil service jobs.
• Private-sector preference: Indiana employers may adopt a written policy giving honorably discharged veterans preference in hiring, promotion and layoffs.
• Guard and Reserve leave: members get 15 days of military leave a year for required training, paid or unpaid at the employer’s discretion, with the right to return to the same or a similar job.
• Military family leave: the spouse, parent, grandparent, child or sibling of a service member ordered to deploy can take 10 days of unpaid leave if they’ve worked for the employer for 12 months.
• Job help: the Department of Workforce Development has veterans’ employment representatives at local WorkOne offices.
• CDL skills waiver: the BMV waives the commercial driving skills test for veterans and service members with a year of military commercial driving experience.

Driver’s Licenses and License Plates

• Veteran indicator: a “V” on your license or ID with a DD-214 showing an other-than-dishonorable discharge; “AM” for active service members and “VS” for surviving spouses. It’s free when added at a new issue or renewal.
• License extension: a resident service member’s license, permit or ID, and their dependents’, stays valid until 90 days after discharge or the end of deployment.
• Specialty plates: the BMV offers 19 military and veteran plates. The Purple Heart plate is free and lets you park at meters free in Indiana; most plates require an IDVA certificate of eligibility (State Form 32584).
• Out-of-state registration: service members stationed elsewhere can keep Indiana plates and renew by mail or online.

Indiana Veterans’ Home

The Indiana Veterans’ Home in West Lafayette provides long-term skilled nursing, short-term rehabilitation, independent living and memory care. Honorably discharged veterans, their spouses and surviving spouses, and Gold Star parents can apply. You generally need one year of Indiana residency immediately before applying (it can be waived if you enlisted from or were discharged to Indiana) and must pass a background check.

• Address: 3851 N. River Road, West Lafayette, IN 47906
• Main line: 765-463-1502; admissions: 765-497-8072

Indiana Veterans Memorial Cemetery

The state veterans cemetery in Madison, next to Clifty Falls State Park, provides the plot, opening and closing of the grave, outer burial container, marker and use of the chapel at no cost to the family. Eligibility follows VA national cemetery rules, so spouses and eligible dependent children qualify too. VA recommends filing VA Form 40-10007 for a pre-need eligibility decision.

• Address: 1415 North Gate Road, Madison, IN 47250
• Phone: 812-273-9220

Families of honorably discharged veterans, including Guard and Reserve, can also request a Governor’s Memorial Certificate through the funeral director, a County Veteran Service Officer or the cemetery.

Hunting, Fishing and State Parks

• Disabled veteran license: resident veterans with a service-connected VA rating can buy a hunting and fishing license for $2.75 a year or $27.50 for 10 years. It covers small game and fishing; deer, turkey, waterfowl, trout and salmon stamps cost the regular price. Your first one goes through the DNR Customer Service Center with State Form 50833 and proof of your rating; renewals are online.
• Service members on leave: Indiana residents on active duty can hunt and fish without a license while home on leave — carry your leave papers and Indiana ID.
• Stationed in Indiana: nonresident active-duty members stationed in the state pay resident prices.
• State parks: disabled veterans and former POWs can buy the annual Golden Hoosier Passport for half price; it covers state parks, recreation areas, reservoirs and forests. Bring Disabled Veteran or POW plates, or an IDVA-certified Form 32584.

Surviving Spouse and Family Benefits

Surviving spouses can claim the $350 and $250 property tax credits when the veteran met the requirements at death, and SBP annuities and DIC are free of Indiana income tax. Children of eligible deceased veterans may qualify for the tuition exemption. Federal survivor benefits usually matter most — see our guide to VA benefits for surviving spouses, including Dependency and Indemnity Compensation.

VA Health Care in Indiana

Indiana has VA medical centers in Indianapolis (Richard L. Roudebush), Fort Wayne and Marion, plus community clinics around the state. If you haven’t enrolled, you can apply online at VA.gov; our VA health care enrollment guide explains priority groups and costs.

How to Claim Indiana Veteran Benefits, Step by Step

1. Gather your documents: your DD-214 and, for disability-based benefits, your VA award letter. IDVA has DD-214s on file for many Hoosiers discharged since 1989; earlier records are with the Indiana State Archives (317-591-5222).
2. Contact your County Veteran Service Officer: every Indiana county has one, and their help with state and federal claims is free.
3. Get an IDVA certificate of eligibility when a benefit needs one, such as specialty plates or the half-price park pass.
4. File with the agency that grants the benefit: your county auditor for property tax (by January 15), ScholarTrack for tuition, the BMV for licenses and plates, and the DNR for hunting and fishing.

Questions about state benefits go to the Indiana Department of Veterans Affairs at 317-232-3910 or 800-400-4520.

Frequently Asked Questions

This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the State of Indiana, the Indiana Department of Veterans Affairs, VA or any government agency. Benefits and eligibility rules change; confirm current details with the Indiana Department of Veterans Affairs, your county auditor or the official Indiana state benefits summary before you apply.