---
title: Indiana Military & Veteran Property Tax Exemptions (2026)
slug: indiana-veteran-property-tax-exemptions-2026
description: >-
  How Indiana cuts disabled veteran property taxes with two deductions, plus how
  the state taxes military pay. Talk with a VeteranPCS agent in Indiana today.
publishedAt: '2025-12-15T09:00:00.000Z'
updatedAt: '2026-06-21T00:00:00.000Z'
author: VeteranPCS
categories:
  - Financial Guidance
canonical: 'https://www.veteranpcs.com/blog/indiana-veteran-property-tax-exemptions-2026'
componentSlug: financial-guidance
stateSlug: indiana
---
# Indiana Military & Veteran Property Tax Exemptions (2026)

If you serve in the military or have served, it helps to know exactly how Indiana handles property taxes for veterans. Indiana does not erase a disabled veteran's whole tax bill the way some states do. Instead, it lowers the value the county can tax through property tax deductions. Indiana 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 Grissom Air Reserve Base near Peru and Kokomo, Naval Support Activity Crane near Bloomington, and Camp Atterbury near Edinburgh and Indianapolis. 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 Indiana Helps Disabled Veterans With Property Taxes

Indiana uses deductions rather than a single broad exemption. A deduction lowers your property's assessed value, which is the dollar figure your county uses to calculate the tax, before the rate is applied. The U.S. Department of Veterans Affairs, known as the VA, is the federal agency that rates service-connected disabilities, and your VA rating decides which deductions you can claim.

As the [Indiana Department of Veterans Affairs explains](https://www.in.gov/dva/state-of-indiana-benefits-and-services/property-tax-deductions/), there are two main veteran deductions, set in Indiana Code 6-1.1-12, sections 13 and 14. They are different sizes and have different rules, and a veteran who qualifies for both can claim both.

### The $24,960 Deduction (Section 13)

The larger deduction lowers your assessed value by $24,960. To claim it, the Department of Veterans Affairs says you must have served during a wartime period, received an honorable discharge, and have a service-connected disability rating of at least 10 percent from the VA. Importantly, there is no limit on the value of the home for this deduction, so a higher-value home can still claim the full $24,960.

### The $14,000 Deduction (Section 14)

The second deduction lowers your assessed value by $14,000, but it comes with a home-value limit. To claim it, you must have served at least 90 days, received an honorable discharge, and either be totally disabled from service or be at least 62 years old with a service-connected disability rating of at least 10 percent. The catch is the cap: the [Department of Veterans Affairs notes](https://www.in.gov/dva/state-of-indiana-benefits-and-services/property-tax-deductions/) that the home's assessed value cannot be more than $200,000 to use this deduction.

A veteran who meets both sets of rules can stack the two deductions, lowering assessed value by up to $38,960. Because these figures and the home-value cap can be changed by the legislature, confirm the current amounts with the Department of Veterans Affairs and your county auditor before you count on them.

### Surviving Spouses and Donated Homes

A surviving spouse may be able to continue a deduction the veteran was receiving. Indiana also has a separate benefit under section 14.5 for a home given to a veteran at no cost by a tax-exempt organization, which scales with the disability rating from 50 percent up to a full deduction at 100 percent. The [Indiana Department of Local Government Finance](https://www.in.gov/dlgf/files/230801-FAQ-Veterans-Deductions.pdf) publishes a veterans deduction guide that walks through the details. Confirm your path with your county auditor before you file.

## How It Works With Your Local Tax Bill

Property tax in Indiana is administered locally. Your county assessor sets the assessed value, your county auditor applies your deductions, and the rate that turns value into a bill is set by the local taxing units where you live. Because rates differ from county to county, the dollars you save from a $24,960 or $14,000 deduction depend on your local rate. The deductions lower the taxable value; they do not cancel the entire bill.

Indiana also has a homestead standard deduction and a supplemental homestead deduction that most owner-occupants receive, and the veteran deductions sit on top of those. If you are weighing where to settle, our guide to the [military bases in Indiana](/blog/what-military-bases-are-in-indiana) can help you picture the local cost of owning a home near Grissom, Crane, or Camp Atterbury.

## Military Pay and Indiana State Income Tax

Indiana has a flat state income tax, and most Indiana counties add a local income tax on top of it. The state rate was 3.00 percent for 2025 and is set to keep stepping down in the years that follow, so check the current figure before you file. The good news for military families is how Indiana treats service pay.

As the [Department of Revenue's military bulletin](https://www.in.gov/dor/files/ib27.pdf) explains, for 2024 and later, Indiana resident members of an active component of the armed forces are exempt from state income tax on their military wages. Members of the reserve components and the National Guard can deduct the wages they earn for that service. Military retirement pay is fully deductible for Indiana residents, and that deduction also reaches a surviving spouse. Combat zone pay is already left out of taxable income, and VA disability compensation is not part of federal income, so Indiana does not tax it either. In short, active-duty wages, retirement pay, and disability pay all get strong protection from Indiana income tax.

## 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 Indiana resident just because your service member got orders here.

The Department of Revenue's military bulletin confirms that a non-domiciled spouse can keep a previous home state, or elect to use the same residence as the service member, which can leave the spouse's Indiana wages free from Indiana income tax. Because that choice affects both states' taxes, confirm yours before you file. For the property tax deductions in this guide, what usually matters most is that you own and live in the home as your primary residence.

## How to Apply and Where to Verify

You claim the veteran deductions through your county auditor, using the Certificate of Eligibility for Disabled Veteran Property Tax Deduction and your VA documentation of the disability rating. File by the state's deadline for the year you want the deduction to apply. Because the deduction amounts and the home-value cap can change, confirm the current numbers with the [Indiana Department of Veterans Affairs](https://www.in.gov/dva/state-of-indiana-benefits-and-services/property-tax-deductions/) and your county auditor before you file.

When you want a local read on a neighborhood and its tax rates, you can ask Catherine James, a VeteranPCS agent in the Indianapolis area, 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 Indiana](https://www.veteranpcs.com/indiana).

## Frequently Asked Questions

### Does Indiana have a property tax exemption for disabled veterans?

Not a single flat exemption, but two deductions that lower your assessed value. One lowers it by $24,960 with no home-value limit, and one lowers it by $14,000 if the home's assessed value is $200,000 or less. A veteran who qualifies for both can claim both. Confirm your eligibility with the [Indiana Department of Veterans Affairs](https://www.in.gov/dva/state-of-indiana-benefits-and-services/property-tax-deductions/) and your county auditor.

### How much is the Indiana disabled veteran property tax deduction?

The two main deductions are $24,960 and $14,000 of assessed value. These lower the value your county taxes, so the dollars you save depend on your local tax rate. The amounts can be changed by the legislature, so verify the current figures before you file.

### What disability rating do I need for the Indiana veteran deduction?

For the $24,960 deduction you generally need a service-connected disability rating of at least 10 percent, wartime service, and an honorable discharge. The $14,000 deduction requires total service-connected disability, or age 62 or older with at least a 10 percent rating, plus a home assessed at $200,000 or less.

### Does Indiana tax military retirement pay?

No. Indiana fully deducts military retirement pay for residents, and the deduction also reaches a surviving spouse. Active-duty military wages are exempt for 2024 and later, and VA disability compensation is not taxed.

### Can I claim both Indiana veteran deductions at once?

Yes, if you meet the rules for each. A veteran who qualifies for the $24,960 deduction and the $14,000 deduction can claim both, lowering assessed value by up to $38,960, subject to the $200,000 home-value cap on the smaller deduction.

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 these deductions, and verify the current rules and amounts with your county auditor and the State of Indiana before you file.

_This content is for informational purposes. Consult a professional for personal financial decisions._