Illinois Veteran Benefits
Complete guide to state benefits for Illinois veterans in 2026
Illinois Tax Advantage
Illinois fully exempts military retirement pay from state income tax! As a flat-tax state, all retirement income is exempt. VA disability compensation is also tax-free.
Illinois Veteran Benefits Summary: Illinois offers full military retirement exemption, property tax exemptions for returning veterans and disabled veterans, IVA grants for education, and strong employment preferences. Illinois has approximately 600,000 veterans.
State Income Tax
Military retirement: Fully exempt
VA disability: Tax-free (federal law)
Property Tax Exemptions
- Returning veteran: $5,000 exemption (2 years)
- 70-100% disabled: Full exemption
- 30-69% disabled: $2,500 exemption
Education Benefits
- IVA Grant: For veterans at IL colleges
- MIA/POW Scholarship: For dependents
- In-state tuition: For all veterans
Employment Benefits
- Veterans' Preference: 10 points
- Disabled veteran: Additional preference
2026 BAH Rates for Illinois
| Location | E-5 w/Dep |
|---|---|
| Chicago / Great Lakes | $2,316 |
| Scott AFB | $1,566 |