Updated January 2026
Illinois Veteran Benefits 2026
Illinois offers several benefits for veterans and military retirees. Here is a summary of the key tax and property benefits available in IL for 2026.
Illinois Highlights
- Full military retirement pay tax exemption
- Graduated property tax exemption by disability %
- Free license plates for disabled veterans
- Illinois Veterans Grant for education
Income Tax Treatment
Illinois has a state income tax.
Military Retirement Pay: Illinois fully exempts military retirement pay, as it exempts virtually all retirement income.
Active Duty Pay: Active duty pay is fully exempt from Illinois state income tax.
VA Disability Compensation: VA disability compensation is tax-free at both the federal and state level in all 50 states. Illinois does not tax VA disability payments.
Property Tax Exemption for Disabled Veterans in Illinois
Type: Graduated by disability rating
Illinois' Standard Homestead Exemption for Veterans with Disabilities (SHEVD) gives a graduated reduction in equalized assessed value (EAV) starting at a 30% rating, and fully exempts the home (first $250,000 EAV) at 70% or more.
| VA disability rating / category | What you get |
|---|---|
| 30% to 49% | $2,500 annual reduction in EAV.Service-connected disability certified by the VA; own and occupy primary residence on Jan 1 of the assessment year (or prorated). |
| 50% to 69% | $5,000 annual reduction in EAV.Same occupancy/certification requirements. |
| 70% or more | Residential property is exempt from taxation - specifically the first $250,000 of EAV is exempt (effectively a full exemption for most homes).Same occupancy/certification requirements. EAV above $250,000 (after removing any commercial-use portion) remains taxable. |
- Income limit: None
- Age requirement: None
- Surviving spouse: An unremarried surviving spouse may continue the SHEVD if they hold title and the veteran previously qualified or was killed in the line of duty; a surviving spouse is also eligible on a primary residence if the veteran's death was service-connected and the spouse is a VA-certified DIC recipient.
- Counts being paid at 100% via unemployability (TDIU)? Varies / not explicitly addressed — confirm with the assessor or state VA
Source: 35 ILCS 200/15-169 (Standard Homestead Exemption for Veterans with Disabilities) and a second official source. Verified June 2026 against primary sources.
To apply, contact your county assessor's office or the Illinois Department of Veterans Affairs. You will typically need your VA disability rating letter (and often your DD‑214) and proof that the home is your primary residence.
Real estate vs. personal property: this benefit applies to real-estate (home/homestead) property tax. Personal-property taxes — such as the annual tax some states levy on vehicles — are separate and generally still apply, even at a 100% rating, unless your state specifically exempts them.
VA Healthcare in Illinois
Illinois has approximately 4 VA medical centers along with community-based outpatient clinics (CBOCs) throughout the state. Veterans enrolled in VA healthcare can receive care at any VA facility nationwide.
To find the nearest VA facility, visit VA.gov Facility Locator.