Veteran Benefits in North Carolina

Key Takeaways

• North Carolina fully exempts military retirement pay and Survivor Benefit Plan (SBP) payments from state income tax — one of 37 states with a complete exemption.
• Disabled veterans with a 100% permanent and total service-connected rating can exclude the first $45,000 of their home’s assessed value from property taxes, with no income limit. Proposed legislation (Senate Bill 660) would increase this to $75,000 in 2025 and up to $500,000 by 2027.
• The Scholarship for Children of Wartime Veterans provides up to eight semesters of financial assistance at North Carolina institutions, though the program currently faces funding limitations for the 2025–2026 academic year.
• North Carolina operates four state veterans homes providing skilled nursing care and four state veterans cemeteries offering free burial for eligible veterans.
• Veterans with a 50% or greater VA disability rating can purchase lifetime hunting and fishing licenses for $10 to $110 depending on license type.
• The state provides employment preference for veterans in all state government hiring and offers military credential-to-civilian licensing pathways.

Table of Contents

• Overview of North Carolina Veteran Benefits
• Income Tax Benefits
• Property Tax Exclusion for Disabled Veterans
• Education Benefits
• Employment and Transition Assistance
• State Veterans Homes
• Recreation and Outdoor Benefits
• State Veterans Cemeteries
• Vehicle and License Plate Benefits
• How to Access North Carolina Veteran Benefits
• Frequently Asked Questions

Overview of North Carolina Veteran Benefits

North Carolina is home to more than 615,000 veterans, representing about 7.3% of the state’s adult population. The state’s deep military roots are reflected in its major installations — Fort Bragg (temporarily renamed Fort Liberty), Camp Lejeune, Marine Corps Air Station Cherry Point, Seymour Johnson Air Force Base, and Coast Guard Base Elizabeth City — and in the comprehensive state-level benefits available to those who have served.

The North Carolina Department of Military and Veterans Affairs (DMVA) serves as the state’s primary agency for veteran services. DMVA operates 12 veterans service centers across the state, manages the state veterans homes and cemeteries programs, and administers the Children of Wartime Veterans scholarship. County Veterans Service Officers are available in most North Carolina counties to provide additional local assistance.

North Carolina has made significant strides in recent years to attract and retain military retirees, most notably by eliminating state income tax on military retirement pay effective January 1, 2021. Combined with the state’s declining flat income tax rate (4.25% for 2025, dropping to 3.99% for 2026) and no tax on Social Security income, the overall tax picture is increasingly favorable for veterans.

Income Tax Benefits

Military Retirement Pay — Fully Exempt

North Carolina fully exempts military retirement pay from state income tax. This exemption, which took effect January 1, 2021, applies to veterans who served at least 20 years, those who medically retired, and veteran survivors receiving Survivor Benefit Plan (SBP) payments. The exemption is claimed as a deduction on Line 20 of Form D-400, Schedule S when filing North Carolina state taxes.

The exemption is rooted in the Bailey v. State of North Carolina decision and subsequent legislation. Veterans who were vested in their military retirement as of August 12, 1989, have all distributions from qualifying retirement accounts exempt from North Carolina income tax regardless of the source of funds. For those who entered service after that date, the 2021 legislation provides the broader exemption.

Even if all retirement income is excludable, veterans must still file a North Carolina return if they meet the minimum gross income filing requirements. A copy of Form 1099-R or W-2 from the payer must be attached to support the deduction.

Active Duty and National Guard Pay

Active-duty military pay is subject to North Carolina income tax following federal tax rules. However, pay received for service in a combat zone or hazardous duty location that is excluded from federal income is also excluded from North Carolina state income tax. Service members receive a 180-day extension to file state taxes from the date they leave a combat zone or are released from a hospital for wounds received in one.

Subsistence and quarters allowances, uniform and equipment allowances, and mustering-out payments are not taxable in North Carolina.

Military Disability Retirement Pay

Military disability retirement pay received as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service is not included in North Carolina taxable income. VA disability compensation, pension payments, and Dependency and Indemnity Compensation (DIC) benefits are also fully tax-exempt.

Military Spouse Tax Protection

Under the federal Military Spouses Residency Relief Act, a nonresident military spouse’s income earned in North Carolina is exempt from state income tax if three conditions are met: the service member is in North Carolina due to military orders, the spouse is in the state only to be with the service member, and the spouse’s state of legal residence is the same as the service member’s. Military spouses may use the same state of residence as the service member for state tax purposes.

Special Tax Provisions

North Carolina also provides that any unpaid state income tax owed before a person enters the U.S. Armed Forces will be canceled and abated if the service member is killed while serving or is receiving service-connected disability compensation. No interest is payable for any refund owed for overpayment of taxes in these circumstances.

Property Tax Exclusion for Disabled Veterans

North Carolina excludes the first $45,000 of assessed value from property taxes on a permanent residence owned and occupied by a qualifying disabled veteran or the unmarried surviving spouse of a qualifying disabled veteran. There is no income limit for this exclusion.

To qualify, a veteran must be:

• Honorably discharged, AND
• Rated by the VA as having a 100% permanent and total service-connected disability, OR
• Receiving benefits for specially adapted housing under 38 U.S.C. § 2101

Surviving spouses also qualify if the veteran died as a result of a service-connected condition, or if the service member died from a service-connected condition in the line of duty. The surviving spouse must not have remarried.

Applications are filed using Form AV-9 and NCDVA-9 through the county tax assessor’s office. The NCDVA-9 certification must be completed by a Veterans Service Officer at either a state veterans service center or county veterans service office. The deadline for submitting applications is June 1 of the tax year.

Proposed Expansion: Senate Bill 660

In the 2025 legislative session, the North Carolina General Assembly introduced Senate Bill 660, the “Honoring Sacrifice: NC Veterans Relief Act.” If enacted, the bill would significantly expand the disabled veteran property tax exclusion:

• July 1, 2025: Increase the exclusion from $45,000 to $75,000
• July 1, 2026: Increase to $125,000
• July 1, 2027: Increase to the lesser of $500,000 or 100% of the appraised value

The bill would also exempt one primary motor vehicle owned by a 100% disabled veteran from personal property tax, allow disabled veterans to prequalify for the homestead exemption before purchasing a home, and establish a $10 million Veterans’ Economic Development Incentive Grant Program for affordable housing, infrastructure, and employment programs. As of early 2026, SB 660 has been referred to the Senate Rules and Operations Committee.

Elderly/Disabled Homestead Exclusion

Separately from the disabled veteran exclusion, North Carolina residents who are age 65 or older or totally and permanently disabled (regardless of veteran status) may qualify for the general homestead exclusion. This program excludes the greater of $25,000 or 50% of the home’s appraised value from property taxes, but requires that the owner’s income not exceed $38,800 for the 2026 tax year. Veterans cannot combine both exclusions but may choose whichever provides the greater benefit.

Education Benefits

Scholarship for Children of Wartime Veterans

The North Carolina Scholarship for Children of Wartime Veterans is a state-funded program that provides financial assistance for up to eight academic semesters at participating North Carolina state colleges, community colleges, technical schools, and approved private institutions. Recipients have eight years to use the benefit.

Applicants must be North Carolina residents age 25 or younger and the qualifying natural or adopted child of a veteran whose service occurred during a period of war. Eligibility is divided into classes:

• Class I-A: Veteran parent died in wartime service or as a result of a service-connected condition
• Class I-B: Veteran parent is rated 100% permanently and totally disabled by the VA
• Class II: Veteran parent is rated at least 20% but less than 100% disabled, or received a Purple Heart
• Class III: Veteran parent served in a combat zone or received hostile fire/imminent danger pay
• Class IV: Veteran parent was a POW or MIA

The veteran must have been a North Carolina resident when entering active service. The application deadline is February 14 each year, and all applications must be submitted online through the DMVA scholarship portal.

Important funding note: As of early 2026, the scholarship program is experiencing funding limitations. Spring 2026 awards for current recipients were prorated at 25% of the Fall 2025 amount, and the application portal for new applicants was not expected to open for the 2026–2027 academic year unless additional funding is appropriated by the General Assembly. Class I recipients (dependents of 100% disabled or deceased veterans) were not affected by the reductions. Veterans and families should check the DMVA scholarship portal for the latest updates.

In-State Tuition

Veterans discharged from active duty who are living in North Carolina receive in-state tuition rates at state institutions without having to meet the standard 12-month residency requirement. This applies to veterans using the GI Bill and other federal education benefits.

Qualifying spouses and children of active-duty service members may also be eligible for in-state tuition without meeting the residency requirement, provided the student is attending a state college using transferred Post-9/11 GI Bill benefits, the student’s abode is in North Carolina, and the student provides a letter of intent to establish state residency.

North Carolina National Guard Tuition Assistance

North Carolina National Guard members are eligible for tuition reimbursement at state institutions. The benefit can be used in conjunction with federal Tuition Assistance and GI Bill benefits. Contact the North Carolina National Guard Education Office for current funding levels and application procedures.

Employment and Transition Assistance

State Employment Preference

North Carolina law establishes that veterans shall be granted preference in employment with every state department, agency, and institution. As codified in NCGS 126-80, Article 13, the policy states: “In appreciation for their service to this State and this country during a period of war, and in recognition of the time and advantage lost toward the pursuit of a civilian career, veterans shall be granted preference in employment.”

The level of hiring preference may vary depending on the position, Civil Service exam requirements, and other factors. Spouses of disabled veterans and surviving spouses of disabled veterans or service members who died in action or from a service-connected disability also receive preference in state government hiring.

Military Credential-to-Civilian Licensing

North Carolina offers qualifying veterans and military spouses credit for military experience toward state professional licensing across a range of career fields, from healthcare to commercial truck driving. This recognition helps accelerate the transition from military to civilian employment by reducing redundant training and certification requirements.

Business Resources

The Business Link North Carolina (BLNC) offers free one-on-one consultations to veterans interested in starting a business. Advisors can help with business plan development, state licensing and permits, and business structure decisions. The service is available Monday through Friday by calling 800-228-8443.

State Veterans Homes

North Carolina operates four state veterans homes providing skilled nursing care to qualified veterans:

• Black Mountain NC State Veterans Home — 100-bed capacity (828-669-0684)
• Salisbury NC State Veterans Home — 99-bed capacity, located on the W.G. Hefner Medical Center campus
• Kinston NC State Veterans Home
• Fayetteville NC State Veterans Home — 150-bed capacity, adjacent to the VA Medical Center (currently closed for replacement)

The Fayetteville facility was closed after identifying significant repair needs and structural deficiencies. DMVA is working to build a replacement facility, though the project is expected to take at least two additional years. In addition, a fifth veterans home location in Kernersville has been referenced in recent DMVA documentation.

All state veterans homes are owned by the State of North Carolina through DMVA and managed by a private operator. The homes receive no state funding through appropriations — they are funded through the cost of care and available resources from residents.

Eligibility requirements:

• Service on active duty for other than training purposes
• Discharged under honorable conditions
• Resident of North Carolina for 24 months
• Referred by a licensed physician and in need of skilled nursing care

Services include 24-hour nursing, IV therapy, physical and occupational therapy, speech therapy, wound care, pain management, hospice, counseling, and activity programming. The rate of payment is based on the actual cost of care and the individual’s ability to pay. The homes accept Medicare, Medicaid, private pay, and commercial insurance. For admissions, contact DMVA at (919) 807-4263.

Recreation and Outdoor Benefits

State Parks

Veterans with service-connected disabilities may receive a free annual pass to North Carolina state parks, which also includes discounted equipment rentals. Contact the North Carolina Division of Parks and Recreation for application details and eligibility requirements.

Hunting and Fishing Licenses

The North Carolina Wildlife Resources Commission offers lifetime hunting and fishing licenses for disabled veterans at reduced rates. To qualify, a veteran must be a North Carolina resident with a 50% or greater VA disability rating.

Available lifetime license types and approximate costs range from $10 to $110 depending on the combination of privileges selected:

• Disabled Veteran Inland Fishing — Statewide inland fishing
• Disabled Veteran Combination Hunting and Inland Fishing — Includes game lands access and Public Mountain Trout Waters
• Disabled Veteran Sportsman — Statewide hunting and inland fishing, including big game and waterfowl privileges
• Disabled Veteran Unified Sportsman/Coastal Recreational Fishing — Full statewide hunting, inland fishing, and coastal recreational fishing

Applications must be filed by mail and require a NCDVA-9 certification form completed by a Veterans Service Officer along with VA documentation. Due to documentation requirements, these licenses cannot be purchased online.

Active-duty service members stationed outside North Carolina who are home on leave for 30 days or less do not need to purchase a fishing or hunting license.

State Veterans Cemeteries

North Carolina operates four state veterans cemeteries:

• Sandhills State Veterans Cemetery — Spring Lake (910-436-5630), near Fort Liberty
• Western Carolina State Veterans Cemetery — Black Mountain (828-669-0684)
• Coastal Carolina State Veterans Cemetery — Jacksonville (910-347-4550), near Camp Lejeune
• Eastern Carolina State Veterans Cemetery — Goldsboro (919-648-0510)

There is no charge for veteran burials. Services provided at no cost include the gravesite, opening and closing of the grave, and a government-furnished headstone. A burial fee applies for eligible dependents. Only government-furnished headstones are authorized in state veterans cemeteries.

All committal services are held in the chapel or at a committal shelter — graveside services are not permitted. Each service is 30 minutes in length.

Eligibility includes honorably discharged former members of the U.S. Armed Forces whose active service was for other than training purposes, as well as Reservists and National Guard members entitled to or who would have been entitled to retired pay for non-regular service. Eligible family members include spouses, widows or widowers, and minor children (under 21, or under 23 if pursuing education) who are dependent on the veteran.

Vehicle and License Plate Benefits

North Carolina offers several vehicle-related benefits for veterans:

Specially Adapted Vehicles: Motor vehicles owned by disabled veterans that are modified with special equipment to accommodate their service-connected disability are exempt from the state highway use tax.

Veteran License Plates: North Carolina offers a variety of veteran-specific license plates through the NC Division of Motor Vehicles. DMVA maintains an FAQ page with information about the certification process for veteran license plates.

Proposed Vehicle Tax Exemption: Senate Bill 660, currently under consideration, would exempt the primary personal vehicle of a 100% disabled veteran from property tax entirely — going beyond the current exemption for specially adapted vehicles.

How to Access North Carolina Veteran Benefits

The NC Department of Military and Veterans Affairs operates 12 veterans service centers across the state, with locations in Canton, Morganton, Hickory, Charlotte, Clemmons, Fayetteville, Garner, Wilmington, Kinston, Wilson, Greenville, and Elizabeth City. A state service office is co-located with the VA Regional Office in Winston-Salem. All services are provided free of charge.

In addition, most North Carolina counties have a County Veterans Service Officer who can provide local assistance with benefits and claims.

To get started:

• Visit the DMVA Benefits & Claims page to find the nearest service office
• Use the online DMVA Resource Guide for 24/7 access to program information
• Bring your DD-214, VA disability letters, and relevant documentation to your appointment

Frequently Asked Questions

This article is provided by USMilitary.org, an independent educational resource. We are not affiliated with the Department of Defense, VA, or any government agency. For official benefit information, visit the NC Department of Military and Veterans Affairs or contact your local veterans service office.