Best States for Veterans 2026: Tax Benefits, Property Tax & VA Resources

Where you live after the military can have a massive impact on your finances. A veteran collecting $30,000 per year in military retirement pay could owe over $1,500 in state income tax in some states while paying nothing in others. Add property tax exemptions worth $3,000 to $8,000 annually for disabled veterans, and the state you choose could mean a $5,000 to $10,000 per year difference.

This guide ranks the best states for veterans in 2026 based on tax policy, property tax exemptions, state veteran programs, and VA facility access. You can also explore state-by-state details on our veteran benefits hub.

How We Ranked the Best States for Veterans

There is no single metric that makes a state "veteran-friendly." We evaluated each state across four categories to build these rankings.

Income tax treatment of military pay. States that impose no income tax or fully exempt military retirement pay score highest. This matters most for military retirees who collect pensions starting as early as age 38 after a 20-year career.

Property tax exemptions for veterans. We prioritized states providing 100% exemptions for veterans rated 100% Permanent and Total (P&T) by the VA. Partial exemptions and general veteran homestead exemptions were also factored in.

State veteran programs and benefits. This includes education benefits beyond the GI Bill, state veteran homes, hiring preferences, and the overall quality of the state Department of Veterans Affairs.

VA facility access and military presence. Proximity to VA medical centers and outpatient clinics matters for healthcare. States with major military installations benefit from commissary access and larger veteran communities. Use the VA disability calculator to estimate your rating before evaluating state-specific benefits.

Top 10 Best States for Veterans in 2026

1. Texas

Texas has no income tax, meaning military retirement pay, civilian wages, and investment income are all untaxed. The state offers a 100% property tax exemption for veterans rated P&T, saving homeowners $5,000 to $12,000 per year. Texas is home to 17 VA medical facilities, and the Texas Veterans Commission operates one of the strongest state veteran services programs in the country. See the Texas veteran benefits page.

2. Florida

Florida matches Texas with no state income tax. The state provides a full property tax exemption for 100% P&T disabled veterans, plus a $5,000 homestead exemption for all honorably discharged veterans. Seven VA medical centers and over 60 outpatient clinics give most residents access to VA care within 30 minutes. Florida's warm climate and 1.5 million veteran residents make it consistently popular among military retirees. See the Florida veteran benefits page.

3. Alaska

Alaska has no state income tax and offers property tax exemptions on the first $150,000 of assessed value for disabled veterans. The state pays an annual Permanent Fund Dividend to all residents, typically $1,000 to $3,200 per person. Joint Base Elmendorf-Richardson and Eielson AFB anchor a strong military presence, with VA facilities in Anchorage and Fairbanks. Learn more on the Alaska veteran benefits page.

4. Nevada

Nevada levies no state income tax on any income type. The state offers property tax exemptions for veterans based on wartime service, with disabled veterans receiving additional reductions. Nevada also provides veteran hiring preferences and fee waivers for veteran-owned businesses. The VA Southern Nevada Healthcare System in Las Vegas serves a growing veteran population. Review all programs on the Nevada veteran benefits page.

5. Wyoming

Wyoming has no state income tax and pairs it with property tax exemptions for disabled veterans. The state has a very low cost of living compared to other no-income-tax states. VA healthcare is served by the Cheyenne and Sheridan VA campuses with several CBOCs across the state. Full details are on the Wyoming veteran benefits page.

6. South Dakota

South Dakota has no state income tax and offers property tax exemptions based on disability percentage. Veterans benefit from a state bonus program and tuition assistance for disabled veterans' dependents. The Sioux Falls and Hot Springs VA campuses provide comprehensive care. See programs on the South Dakota veteran benefits page.

7. Tennessee

Tennessee has no state income tax on any income type, having fully eliminated its Hall Income Tax in 2021. The state offers property tax relief for disabled veterans and their surviving spouses. VA medical centers in Nashville, Memphis, and Johnson City serve the state, and Fort Campbell provides a significant military community. Check the Tennessee veteran benefits page for details.

8. Virginia

Virginia earns its spot through strong military presence, expanding tax benefits, and exceptional VA access. Starting in 2024, the state began phasing in an exemption for military retirement pay. Northern Virginia, Hampton Roads, and Richmond are home to the Pentagon, Naval Station Norfolk, and dozens of installations. Virginia offers property tax exemptions for 100% P&T disabled veterans and generous state hiring preferences. Explore all benefits on the Virginia veteran benefits page.

9. North Carolina

North Carolina fully exempts military retirement pay from state income tax as of 2024. The state offers property tax exemptions for disabled veterans and is home to Fort Liberty (formerly Fort Bragg), Camp Lejeune, and multiple Air Force installations. Four VA medical centers serve the state. The moderate climate and low cost of living outside Charlotte and Raleigh add to the appeal. See the North Carolina veteran benefits page.

10. Alabama

Alabama fully exempts military retirement pay and offers a full property tax exemption for 100% P&T disabled veterans. With one of the lowest costs of living in the nation, retirement pay stretches further here than most states. VA medical centers in Birmingham, Tuscaloosa, Montgomery, and Tuskegee provide care. Use the military retirement calculator to estimate your pension. See the Alabama veteran benefits page.

States That Don't Tax Military Retirement

A typical E-7 retiring at 20 years receives roughly $28,000 to $32,000 per year. In a state with a 5% tax rate, that costs $1,400 to $1,600 per year. The following states fully exempt military retirement pay as of 2026:

The trend has accelerated since 2020 as states compete to attract military retirees. If you also earn civilian income, the no-income-tax states offer the broadest protection.

States with the Best Property Tax Exemptions

Property tax exemptions can be even more valuable than income tax benefits for veterans with higher VA disability ratings. A 100% P&T veteran in Texas who owns a $350,000 home saves the entire property tax bill—often $7,000 to $10,000 per year.

States offering a full 100% property tax exemption for veterans rated 100% Permanent and Total disabled include:

• Texas — Complete exemption on primary residence, no cap on home value. Also extends to surviving spouses.
• Florida — Full exemption for 100% P&T veterans. Discount transfers to surviving spouse.
• Alabama — Full exemption for 100% P&T disabled veterans on primary residence.
• Virginia — Full exemption for 100% P&T veterans, effective since 2011. Extends to surviving spouses.
• Arkansas — Full exemption for 100% disabled veterans on primary residence.
• Illinois — Full exemption for veterans with a 70% or higher service-connected disability on the homestead.
• Michigan — Full exemption for 100% disabled veterans.
• New Hampshire — Full exemption available for certain 100% disabled veterans (varies by municipality).
• Oklahoma — Full exemption for 100% P&T veterans on homestead up to specified limits.

Veterans with partial disability ratings should also consider states with scaled exemptions. Many states reduce assessed value by a fixed amount based on your VA rating, saving $200 to $600 per year. To understand how Permanent and Total disability status affects your benefits, review our detailed P&T guide.

States to Avoid (Highest Tax Burden)

No state taxes VA disability compensation (it is federally tax-exempt), but some states create a heavier overall burden through high income tax rates and minimal property tax relief.

California stands out as the most expensive state for military retirees. The state's top income tax rate of 13.3% and high cost of living make it costly despite recent partial exemptions. A retiree earning $35,000 in pension and $50,000 in civilian wages could face a state tax bill exceeding $4,000 versus zero in Texas.

Vermont taxes military retirement as ordinary income with no special exemption. Combined with high property taxes, it is one of the least financially attractive states for retirees. Other high-burden states include Delaware, Maryland (partial exemption only for retirees over 55), and Georgia (limited exemptions for retirees under 62).

Keep in mind that "best" and "worst" depend on your situation. A veteran with a 100% P&T rating and no civilian income may value property tax exemptions over income tax policy. Use the military retirement calculator to estimate your pension, then compare how each state would treat that income.

Frequently Asked Questions

What is the best state for veterans to live in?

Texas is widely considered the best state for veterans in 2026. It has no state income tax, a full property tax exemption for 100% P&T disabled veterans, extensive state veteran programs, and numerous VA medical centers. Florida is a close second. The best choice depends on your priorities—climate, cost of living, and career opportunities all matter beyond tax policy.

Which states do not tax military retirement pay?

Eight states have no income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Beyond those, over 30 additional states now fully exempt military retirement from state income tax, including Alabama, Illinois, North Carolina, and Pennsylvania.

Do veterans get property tax exemptions?

Yes. States like Texas, Florida, Alabama, and Virginia offer a complete 100% exemption for veterans rated 100% P&T disabled. Other states offer partial exemptions based on disability rating or a fixed dollar amount reduction in assessed property value.

Is VA disability compensation taxed by any state?

No. VA disability compensation is tax-free at both the federal and state level. No state taxes VA disability payments. The important distinction is between VA disability compensation (always tax-free) and military retirement pay (taxed by some states). Use the VA disability calculator to estimate your rating and monthly compensation.

Should I move to a no-income-tax state as a military retiree?

It depends on your full financial picture. Since most states now exempt military retirement pay, the advantage of no-income-tax states is smaller than it used to be. Consider property taxes, cost of living, VA healthcare access, and quality of life. A state with a 3% income tax but a full property tax exemption and low cost of living might save you more than a no-income-tax state with expensive housing.