--- title: Illinois Military & Veteran Property Tax Exemptions (2026) slug: illinois-veteran-property-tax-exemptions-2026 description: >- How Illinois lowers property tax for disabled veterans with an EAV reduction that scales by rating, plus how it taxes military pay. Talk to a VeteranPCS agent. publishedAt: '2025-12-25T09:00:00.000Z' updatedAt: '2026-06-22T00:00:00.000Z' author: VeteranPCS categories: - Financial Guidance canonical: 'https://www.veteranpcs.com/blog/illinois-veteran-property-tax-exemptions-2026' componentSlug: financial-guidance stateSlug: illinois --- # Illinois Military & Veteran Property Tax Exemptions (2026) If you serve in the military or have served, Illinois offers a property tax break for disabled veterans that grows as your disability rating rises, and at the top it can wipe out the bill on your home. Illinois draws many military families after a PCS, which is short for Permanent Change of Station, the official military move from one duty station to another, with Scott Air Force Base near Belleville and O'Fallon in the St. Louis metro area, Naval Station Great Lakes near North Chicago, and the Rock Island Arsenal in the Quad Cities. This guide explains the main rules in plain language and points you to the state's own sources. Tax law changes, so treat these figures as a starting point and confirm the current rules before you file. ## How Illinois Helps Disabled Veterans With Property Taxes Illinois gives disabled veterans a break through the Standard Homestead Exemption for Veterans with Disabilities, often shortened to SHEVD. As the [Illinois Department of Revenue explains](https://tax.illinois.gov/localgovernments/property/disabledveteraninfo.html), this exemption, set in state law at 35 ILCS 200/15-169, lowers the equalized assessed value of a qualifying veteran's primary home. The U.S. Department of Veterans Affairs, known as the VA, is the federal agency that rates service-connected disabilities, and your rating decides the size of the break. Equalized assessed value, or EAV, is the figure your county uses to calculate your property tax. It is not your home's full market value. Lowering your EAV lowers the part of your home's value that gets taxed, so a larger EAV reduction means a smaller tax bill. ### The Exemption Amounts by Disability Rating The SHEVD is tiered, so the reduction climbs with your service-connected rating. As the [St. Clair County Veterans Assistance Commission](https://www.vac4scc.org/commission_services/initial_disabled_veterans_exemption_(shevd).php) and the Illinois Department of Revenue describe it, the tiers work like this: - 30 percent to less than 50 percent disability: a $2,500 reduction in EAV - 50 percent to less than 70 percent disability: a $5,000 reduction in EAV - 70 percent or more disability: the home is fully exempt from property tax, as long as its equalized assessed value is less than $250,000 That top tier is the headline benefit. A veteran rated 70 percent or higher whose home has an EAV under $250,000 pays no property tax on that residence. Because the dollars a $2,500 or $5,000 EAV reduction saves depend on your local tax rate, confirm what it means for your bill with your county. ### Surviving Spouses The benefit can carry to a surviving spouse. The unmarried surviving spouse of a qualifying veteran can keep the SHEVD if the veteran was receiving it before death, and the unmarried surviving spouse of a service member killed in the line of duty may also qualify for the full exemption. Because the details depend on your situation, confirm them with your county before you count on the benefit. ## How It Works With Your Local Tax Bill Property tax in Illinois is assessed and collected at the county level, and you apply for the SHEVD with your Chief County Assessment Officer using Form PTAX-342. One detail matters: a veteran with disabilities, or the surviving spouse, must file Form PTAX-342-R each year to keep the exemption, so mark your calendar. Near Scott Air Force Base that office is in St. Clair County, and near Naval Station Great Lakes it is in Lake County. Illinois also offers two more veteran-related breaks worth knowing about: the Specially Adapted Housing Exemption for Veterans with Disabilities, for homes adapted with federal help, and the Returning Veterans' Homestead Exemption, a one-time reduction for the year you return from active duty in an armed conflict. If you are weighing where to settle, our guide to the [military bases in Illinois](/blog/what-military-bases-are-in-illinois) can help you picture the local cost of owning a home. ## Military Pay and Illinois State Income Tax Illinois has a flat individual income tax rate of 4.95 percent, but it treats military pay generously. As the Illinois Department of Revenue's [filing guide for military personnel](https://tax.illinois.gov/research/publications/pubs/illinois-filing-requirements-for-military-personnel.html) explains, the state does not tax military pay earned by service members. You report it on your federal return, then subtract it on Illinois Schedule M, so it is not taxed by Illinois. Military retirement pay gets the same kind of protection. The federally taxed portion of pay from a government retirement plan, including a military pension, can be subtracted on your Illinois return, so Illinois does not tax your military retirement either. VA disability compensation is not part of your federal income, so the state does not tax it. Between exempt active-duty pay, subtracted retirement pay, and untaxed VA compensation, many military families owe little or no Illinois income tax on their service income. Rates and rules can change, so confirm the current details with the Department of Revenue before you file. ## A Note for Military Spouses: MSRRA If you are a military spouse, the Military Spouse Residency Relief Act, known as MSRRA, may matter to you. MSRRA is a federal law that lets a military spouse keep a home state for tax and voting purposes even after moving on military orders. You do not automatically become an Illinois resident just because your service member got orders here. Under the related federal rules, a service member, the spouse, or both may choose the service member's home state, the spouse's home state, or the service member's permanent duty station for residency. Because that choice affects both states' taxes, confirm yours before you file. For the property tax exemption in this guide, what usually matters most is that the qualifying veteran owns and lives in the home as the primary residence. ## How to Apply and Where to Verify You claim the SHEVD with your Chief County Assessment Officer by filing Form PTAX-342 with your VA disability documentation, then file Form PTAX-342-R each year to keep it. Because the rules and deadlines can vary by county, confirm the current details with your county assessment office and the [Illinois Department of Veterans' Affairs](https://veterans.illinois.gov/services-benefits/real-estate.html) before you file. When you want a local read on a neighborhood and its tax rates, you can ask Lisa Diserens, a VeteranPCS agent in the Shiloh area near Scott Air Force Base, for current listings and a sense of local property taxes. If a VA loan is part of your plan, which is a home loan backed by the U.S. Department of Veterans Affairs, learn [what the benefits of a VA loan are](/blog/what-are-the-benefits-of-a-va-loan), see [how a zero-down VA loan works](/blog/how-does-a-0-down-va-loan-work), read our [complete guide to buying your first home with a VA loan](/blog/complete-guide-to-buying-your-first-home-with-a-va-loan), and review the [2026 VA loan limits for military homebuyers](/blog/2026-va-loan-limits-explained-for-military-homebuyers). When you are ready, you can [connect with a VeteranPCS lender](https://www.veteranpcs.com/contact-lender) or [connect with our VeteranPCS network in Illinois](https://www.veteranpcs.com/illinois). ## Frequently Asked Questions ### Do disabled veterans pay property taxes in Illinois? It depends on your rating. A veteran rated 70 percent or higher pays no property tax on a primary home with an equalized assessed value under $250,000. Veterans rated 50 to 69 percent get a $5,000 EAV reduction, and veterans rated 30 to 49 percent get a $2,500 EAV reduction. Confirm your eligibility with your county and the Illinois Department of Veterans' Affairs. ### What is the Illinois Standard Homestead Exemption for Veterans with Disabilities? It is a tiered reduction in the equalized assessed value, or EAV, of a veteran's primary home, set by state law at 35 ILCS 200/15-169. The reduction is $2,500 at a 30 to 49 percent rating, $5,000 at 50 to 69 percent, and a full exemption at 70 percent or more when the home's EAV is below $250,000. ### Do I have to reapply for the Illinois veteran exemption every year? Yes. A veteran with disabilities or the surviving spouse must file Form PTAX-342-R each year with the Chief County Assessment Officer to keep the SHEVD. You first apply using Form PTAX-342. ### Does Illinois tax military retirement pay? No. Illinois does not tax military pay, and the federally taxed portion of a military pension can be subtracted on your Illinois return, so the state does not tax your military retirement. VA disability compensation is not taxed either. ### Can a surviving spouse claim the Illinois exemption? In many cases, yes. The unmarried surviving spouse of a qualifying veteran can keep the SHEVD if the veteran received it before death, and the unmarried surviving spouse of a service member killed in the line of duty may qualify for the full exemption. Confirm the conditions with your county. Property tax rules and dollar amounts change from year to year, and your situation may have details a general guide cannot cover. Please consult a tax professional or attorney before making decisions based on this exemption, and verify the current rules and amounts with your county assessment office and the State of Illinois before you file. _This content is for informational purposes. Consult a professional for personal financial decisions._