KEY TAKEAWAYS
- Michigan does not tax military retirement pay or active-duty military pay. You still file the MI-1040 and subtract the pay on Schedule 1.
- Veterans rated 100% permanent and total, individually unemployable, or approved for specially adapted housing pay no property tax on their homestead, with no income test or value cap.
- Since January 1, 2025, the disabled veteran property tax exemption no longer has to be refiled every year. Once granted, it stays in place until you rescind it or the assessor revokes it.
- The Children of Veterans Tuition Grant pays up to $2,800 a year, $11,200 total, for children of veterans who died or became totally and permanently disabled from service.
- Veterans rated 100% permanent and total or individually unemployable get free Michigan hunting and fishing licenses, and certain plate holders get free state park entry.
- Michigan Income Tax Benefits for Veterans
- Michigan Disabled Veteran Property Tax Exemption
- Michigan Education Benefits for Veterans and Families
- Michigan Veteran Employment Benefits
- Michigan Veterans Homes and Home Buying
- Michigan Hunting, Fishing and State Park Benefits
- Michigan Veteran Burial Benefits
- How to Get Help With Michigan Veteran Benefits
- Frequently Asked Questions
Michigan is one of the better states in the Midwest for a veteran who owns a home or draws military retired pay. Retired pay and active-duty pay are both exempt from the state’s 4.25% income tax, and a veteran rated 100% permanent and total pays no property tax on the house at all. The state also runs three veterans homes, a tuition grant for children of fallen and disabled veterans, and one of the larger state tuition programs for Guard members and their families. This guide covers each Michigan benefit for 2026: who qualifies, what it pays and the form or office that gets it started.
Michigan Income Tax Benefits for Veterans
Michigan taxes most income at a flat 4.25% for tax year 2025, but it carves out the two biggest sources of military income entirely.
Military retirement pay: fully exempt
Michigan Treasury states that military retirement benefits paid to retirees of the U.S. armed forces for their service are exempt from Michigan income tax, according to its military retirement FAQ. There is no age requirement and no dollar cap. You report the pay on Schedule W and subtract it on Schedule 1, even when no Michigan tax was withheld.
Only the retiree, or a surviving spouse in the case of death or disability, can take the subtraction. A civilian pension from a military employer is not military retired pay; it goes through Michigan’s general pension deduction on Form 4884 instead. If you are still working out what your pension will be, the military retirement pay calculator shows the federal amount before any state tax question comes up.
Active-duty pay
Treasury’s military pay FAQ is equally direct: active-duty military pay is exempt from Michigan income tax. You still file the MI-1040 with Schedules 1 and W to claim the subtraction. Two limits matter: civilian pay from the military does not qualify, and investment income such as interest and dividends is still taxable.
The $500 disabled veteran exemption
On top of the standard $5,800 personal exemption, Michigan gives a $500 exemption allowance for a qualified disabled veteran on the 2025 MI-1040. It covers a taxpayer, spouse or dependent who served on active duty, received an honorable or general discharge and has a disability incurred or aggravated in the line of duty. It can be claimed on only one return, per the MI-1040 instructions.
Military spouses
A spouse who lives in Michigan only to be with a servicemember stationed here can keep a legal residence in another state under the federal Military Spouses Residency Relief Act. That spouse files as a Michigan nonresident on Schedule NR, so wages earned in Michigan are not taxed by Michigan.
VA disability compensation and Dependency and Indemnity Compensation are federally tax-free and are not Michigan income either. Survivors can read how DIC and the Survivor Benefit Plan work at the federal level.
Michigan Disabled Veteran Property Tax Exemption
This is Michigan’s most valuable veteran benefit. A qualifying disabled veteran pays no property tax on the homestead, which on a typical Michigan home can be worth several thousand dollars a year. The exemption is set by MCL 211.7b, and the State Tax Commission explains it in Bulletin 19 of 2023.
Who qualifies
You must own and occupy the home as your homestead, be a Michigan resident, have been discharged under honorable conditions, and have one of these VA determinations:
- A rating of 100% permanent and total as a result of military service
- A rating of individual unemployability
- A VA certificate showing you received assistance for specially adapted housing; our specially adapted housing grant guide covers that program
There is no income limit and no cap on the home’s value. The assessor needs the VA letter itself; a county veterans office letter is not accepted in its place.
How to apply
- Request a current award letter from VA showing the qualifying rating.
- Complete Form 5107, Affidavit for Disabled Veterans Exemption.
- File it with your city or township assessor, not the county, between January 1 and December 31 of the year you are claiming.
What changed
Starting January 1, 2025, a granted exemption stays in effect without annual reapplication, under MCL 211.7c. It ends only when you rescind it or the assessor revokes it. If you sell, move or stop qualifying, file Form 6054 to rescind within 45 days. If the assessor revokes it with Form 6055, you have 35 days to appeal to the Michigan Tax Tribunal.
Surviving spouses
An unremarried surviving spouse of a veteran who was eligible when he or she died keeps the exemption, and it can move with the spouse to a different home in Michigan. Remarriage ends it.
If you don’t qualify for the full exemption
Michigan’s Homestead Property Tax Credit, filed on the MI-1040 CR, refunds part of the property tax or rent paid by lower-income households. For 2025 the maximum credit is $1,900, households with total resources above $71,500 get nothing, and the credit starts phasing out at $62,500. It is open to all residents, so a veteran rated below 100% may still qualify on income.
Michigan Education Benefits for Veterans and Families
Children of Veterans Tuition Grant
The Children of Veterans Tuition Grant helps children of Michigan veterans who were killed in action, died of service-connected causes, became totally and permanently disabled from service, or are listed as missing in action. For a full-time student it pays up to $2,800 a year, or $1,400 a semester. Three-quarter-time students get $1,050 a semester and half-time students $700.
- Up to four academic years, eight semesters or $11,200, whichever comes first
- Students must be older than 16 and younger than 26, and awards end at 26
- The student must have lived in Michigan for 12 months before applying
- Apply once through the MiSSG student portal, file the FAFSA every year and send the veteran’s DD-214 and proof of death or disability
The deadline for 2026-27 is June 30, 2027. The grant is paid to the first Michigan college listed on the FAFSA.
Michigan National Guard State Tuition Assistance
MINGSTAP pays tuition for active Michigan National Guard members at any public or private college, university, vocational, technical or trade school in Michigan. Since Public Act 33 of 2023, it also covers a member’s spouse and dependent children, who must use it before 26.
| Program type | MINGSTAP cap |
|---|---|
| Training or certificate programs | Up to $6,000 |
| Master’s degree | Up to $6,000 |
| Associate degree | Up to $14,400 |
| Bachelor’s degree | Up to $14,400 |
Members must be in good standing, not absent without leave or facing charges. Questions go to MINGSTAP@michigan.gov or 517-481-7640.
Using the GI Bill in Michigan
Public colleges must charge in-state tuition to veterans and family members using the Post-9/11 GI Bill under federal law, which matters if you separate somewhere else and move to Michigan for school. A servicemember who wants to pass the benefit to a spouse or child has to act while still serving; see how GI Bill transfer works.
Michigan Veteran Employment Benefits
State civil service preference
Michigan’s Civil Service Commission gives veterans’ preference under Civil Service Rule 3-8, as its veterans’ preference summary explains. Eligible veterans have 90 or more days of active duty and an honorable discharge. Preference also extends to disabled veterans, surviving spouses, and spouses of veterans with a service-connected rating above 50%.
In 2021 the Commission widened the program. Current state employees can now use preference on promotional postings, military retirees can use it, more than one form of preference can apply to a single posting, and servicemembers within six months of separation can register with proof of a likely honorable discharge. You must register with the Commission to receive preference and still meet the job’s minimum qualifications.
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Job help
Michigan Works! service centers give veterans priority of service for job search help, training and employer connections. Tell the staff you are a veteran when you first visit.
Michigan Veterans Homes and Home Buying
Michigan’s three veterans homes
The Michigan Veterans Homes system runs three state homes, according to a February 2026 House Fiscal Agency brief:
| Home | Location | Notes |
|---|---|---|
| Grand Rapids Home for Veterans | Grand Rapids | Dates to 1886; replacement campus completed September 2021 |
| Chesterfield Township Home for Veterans | Chesterfield Township, Macomb County | Opened April 2021, serving metro Detroit |
| D.J. Jacobetti Home for Veterans | Marquette | Upper Peninsula; a replacement building broke ground May 2025 and is due by late 2027 |
What a resident pays is set each year but adjusted to the member’s income, assets, marital status and dependents, and many members pay the minimum. VA also pays the homes a daily rate per resident. A veteran with a combined service-connected rating of 70% or more qualifies for VA’s higher “prevailing” nursing rate, which shapes what the home receives on the veteran’s behalf. Enrolling in VA health care first makes the admission process easier.
Buying a home in Michigan
A VA loan needs no down payment, and veterans who receive VA disability compensation pay no VA funding fee; our VA loan guide covers the program. If you also need help with closing costs, the Michigan State Housing Development Authority’s MI 10K DPA loan lends up to $10,000 at 0% interest with no monthly payment, repaid only when you sell, refinance, pay off the first mortgage or stop living in the home. It must be paired with an MSHDA MI Home Loan and is limited to low- and moderate-income buyers.
Once you own the home, the property tax exemption above is what makes Michigan especially strong for veterans rated 100% permanent and total.
Michigan Hunting, Fishing and State Park Benefits
Free hunting and fishing licenses
Michigan residents rated totally and permanently disabled at the 100% rate, or individually unemployable, by VA can get hunting and fishing licenses free, per the Michigan Veteran Affairs Agency’s recreation page. Bring documentation of your disabled veteran status when you apply and carry it while you hunt or fish.
State parks
Medal of Honor recipients, 100% disabled veterans and former prisoners of war get free entry to facilities that require a Recreation Passport. The catch: you need the matching specialty license plate on your vehicle to get in free.
Other outdoor programs
- Quieter Fourth of July camping: the DNR and MVAA set aside campsites farther from typical fireworks displays for veterans who want a quieter holiday.
- Michigan Operation Freedom Outdoors: outdoor recreation for wounded veterans at Sharonville State Game Area and the neighboring Camp Liberty property.
Federal recreation benefits stack on top of these. Veterans get a free lifetime national park pass, good at fee areas such as Sleeping Bear Dunes National Lakeshore.
Michigan Veteran Burial Benefits
National cemeteries in Michigan
Michigan does not run a state veterans cemetery. Two VA national cemeteries serve the state: Great Lakes National Cemetery in Holly and Fort Custer National Cemetery in Augusta, near Battle Creek. Burial there is free for eligible veterans and many family members and includes the grave, opening and closing, a headstone or marker, and perpetual care.
County burial allowance
Under MCL 35.801, the county pays $300 toward burial for an eligible veteran or spouse. The veteran must have served at least 90 days of active duty, or less with a service-connected disability, and been discharged under honorable conditions. Residency, estate-size limits and a two-year filing deadline apply, so apply through your county veterans affairs office.
VA’s own burial allowance is larger and separate; see our VA burial allowance guide for the current federal amounts.
How to Get Help With Michigan Veteran Benefits
The Michigan Veteran Affairs Agency runs the Michigan Veteran Resource Service Center at 1-800-MICH-VET (1-800-642-4838), staffed weekdays from 8 a.m. to 4:50 p.m. It helps with discharge papers, connects you with a county or service-organization Veteran Service Officer, and handles referrals to the Michigan Veterans Trust Fund.
The Michigan Veterans Trust Fund makes one-time emergency grants to wartime-era veterans facing a temporary hardship, generally no more than once every two years. It requires at least 180 days of active service and an honorable discharge, and a spouse may also be eligible. Applications go through your county veterans office.
Most state benefits above start with a VA letter. Get your current award letter showing your rating before you visit an assessor, college or DNR office. If you are comparing Michigan with a neighboring state, see the guides for Ohio, Indiana and Wisconsin, or start from the state benefits hub.
RELATED READING
Ohio’s tax-free retired pay, the enhanced homestead exemption and 20% civil service credit.
Eligibility, entitlement, funding fees, and how the $0-down program works.
Property tax breaks, income tax exemptions and state programs in all 50 states.
Frequently Asked Questions
No. Michigan Treasury says military retirement benefits paid to retirees of the U.S. armed forces are exempt from Michigan income tax, with no age requirement or cap. You report the pay on Schedule W and subtract it on Schedule 1 of the MI-1040. A civilian pension from a military employer is different and goes through the general pension deduction on Form 4884.
Not on that rating alone. Michigan’s exemption requires a VA determination of 100% permanent and total disability, a rating of individual unemployability, or VA assistance for specially adapted housing. Ask VA for a letter showing your exact status. If your rating is later made permanent, file Form 5107 with your city or township assessor in that tax year.
No longer. Starting January 1, 2025, a granted disabled veteran exemption stays in effect without annual reapplication under MCL 211.7c. It ends only when you rescind it with Form 6054, which you must file within 45 days of moving or no longer qualifying, or when the assessor revokes it. You have 35 days to appeal a revocation to the Michigan Tax Tribunal.
The Children of Veterans Tuition Grant pays up to $2,800 a year for a full-time student, for up to four years or $11,200 in total. You must be older than 16 and younger than 26 and have lived in Michigan for 12 months. Apply once through the MiSSG portal, file the FAFSA every year and send your parent’s DD-214 and proof of the disability rating.
Yes. Since Public Act 33 of 2023, MINGSTAP covers a member’s spouse and dependent children as well as the member, at Michigan public and private colleges and trade schools. Caps are up to $14,400 for associate and bachelor’s programs and $6,000 for certificate, training and master’s programs. Children must use it before 26.
Yes, if you are a Michigan resident rated 100% permanent and total or individually unemployable by VA. The licenses are free, but you must show proof of your disabled veteran status when you get them and carry it while you hunt or fish. Free state park entry is separate and requires the matching specialty license plate on your vehicle.
This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the State of Michigan, the Michigan Veteran Affairs Agency, the Department of Veterans Affairs, the Department of Defense or any government agency. State programs and amounts change; confirm current details with the Michigan Veteran Affairs Agency or by calling 1-800-MICH-VET.