Illinois Disabled Veteran Property Tax Exemption

The exemption comes off equalized assessed value, the value on which your tax is figured, not off market value. A home at or under $250,000 of EAV that qualifies at 70 percent or more is fully exempt; above that, the first $250,000 of EAV is exempt and the rest is taxed. The rating is the one the VA certifies as of the date you submit the application for that taxable year.

• If the veteran has a service connected disability of 70% or more, as certified by the VA as of the date the application is submitted for the applicable taxable year, the first $250,000 in equalized assessed value of the property is exempt.

  “of 70% or more, as certified by the United States Department of Veterans Affairs as of the date the application is submitted for the exemption under this Section for the applicable taxable year, then the first $250,000 in equalized assessed value of the property is exempt from taxation under this Code; and”

• A service connected disability of 50% or more but less than 70%, as certified by the VA as of the date the application is submitted, gets an annual exemption of $5,000.

  “of 50% or more but less than 70%, as certified by the United States Department of Veterans Affairs as of the date the application is submitted for the exemption under this Section for the applicable taxable year, then the annual exemption is $5,000;”

• A service connected disability of 30% or more but less than 50%, as certified by the VA as of the date the application is submitted, gets an annual exemption of $2,500.

  “of 30% or more but less than 50%, as certified by the United States Department of Veterans Affairs as of the date the application is submitted for the exemption under this Section for the applicable taxable year, then the annual exemption is $2,500;”

You must be an Illinois resident veteran with a service-connected disability, certified by the VA, for which you receive disability compensation, and the home must be your primary residence. Property rented for more than 6 months is presumed to be used for commercial purposes, and any commercial part is left out. If you do not live in the home on January 1 the exemption is prorated by month. A veteran who claims the exemption under Section 15-165 or 15-168 may not also claim this one.

For taxable years 2024 and after a World War II veteran’s property is exempt regardless of the level of disability, but the definition of a veteran for 2023 and after still requires a service-connected disability certified by the VA and disability compensation, so the veteran needs a rated disability.

The exemption continues if you move to a nursing home or a VA facility, as long as your spouse still lives in the home, or the home stays unoccupied but you still own it.

• For taxable years 2023 and after, a veteran is an Illinois resident who served in the Armed Forces on active duty or State active duty, the Illinois National Guard or the Reserve Forces and who has a service-connected disability, as certified by the VA, and receives disability compensation.

  “For taxable years 2023 and thereafter, "veteran" means an Illinois resident who has served as a member of the United States Armed Forces on active duty or State active duty, a member of the Illinois National Guard, or a member of the United States Reserve Forces and who has a service-connected disability, as certified by the United States Department of Veterans Affairs, and receives disability compensation.”

• A qualified residence is real property, less any portion used for commercial purposes, that is the primary residence of a veteran with a disability; property rented for more than 6 months is presumed to be used for commercial purposes.

  “"Qualified residence" means, for tax year 2023 and thereafter, real property, but less any portion of that property that is used for commercial purposes, that is the primary residence of a veteran with a disability. Property rented for more than 6 months is presumed to be used for commercial purposes.”

• If the person qualifying does not occupy the residence as of January 1 of the taxable year, the exemption is prorated on a monthly basis.

  “If the person qualifying for the exemption does not occupy the qualified residence as of January 1 of the taxable year, the exemption granted under this Section shall be prorated on a monthly basis.”

• A taxpayer who claims an exemption under Section 15-165 or 15-168 may not claim an exemption under this Section (15-169).

  “A taxpayer who claims an exemption under Section 15-165 or 15-168 may not claim an exemption under this Section.”

• For taxable years on or after 2024, the property of a veteran who was a member of the Armed Forces during World War II is exempt regardless of the veteran’s level of disability.

  “For taxable years on or after 2024, if the veteran was a member of the United States Armed Forces during World War II, then the property is exempt from taxation under this Code regardless of the veteran's level of disability.”

The exemption carries over to the veteran’s surviving spouse while the spouse holds title, lives in the home and does not remarry. If the spouse sells the home, an exemption of up to the amount granted on the most recent tax roll may move to a new primary residence. For taxable year 2023 and after the statute defines a surviving spouse to include the spouse of a veteran who was killed in the line of duty, the spouse of a veteran who qualified but never applied (if the spouse has lived in Illinois since the death), and the spouse of a veteran whose death was determined to be service-connected who gets VA dependency and indemnity compensation.

• The exemption carries over to the surviving spouse as long as the spouse holds legal or beneficial title, permanently resides in the home, and does not remarry.

  “The tax exemption under this Section carries over to the benefit of the veteran's surviving spouse as long as the spouse holds the legal or beneficial title to the homestead, permanently resides thereon, and does not remarry.”

• The surviving spouse of a veteran whose death was determined to be service-connected, who is certified by the VA as a recipient of dependency and indemnity compensation as of the date the application is submitted, also gets the first $250,000 of EAV exempt.

  “veteran whose death was determined to be service-connected and who is certified by the United States Department of Veterans Affairs as a recipient of dependency and indemnity compensation under federal law as of the date the application is submitted for the exemption under this Section for the applicable taxable year, then the first $250,000 in equalized assessed value of the property is also exempt from taxation under this Code.”

Apply to your county’s chief county assessment officer during the application period in effect for your county; the statute leaves the dates to each county, so ask your county or township assessor for this year’s deadline and form. The assessor may decide eligibility by application, visual inspection, questionnaire or other reasonable methods under guidelines from the Illinois Department of Revenue.

Most veterans must reapply every year. A veteran with a combined service-connected rating of 100 percent who is deemed permanently and totally disabled, as certified by the VA, no longer has to reapply, and a World War II veteran need not reapply.

• Each taxpayer granted the exemption must reapply on an annual basis, except a World War II veteran, and the application must be made during the application period in effect for the county of residence.

  “each taxpayer who has been granted an exemption under this Section must reapply on an annual basis, except that a veteran who qualifies as a result of his or her service in World War II need not reapply. Application must be made during the application period in effect for the county of his or her residence.”

• A veteran with a combined rating of 100% who is deemed permanently and totally disabled, as certified by the VA, no longer has to reapply each year; the exemption stays in effect for as long as it would otherwise be permitted.

  “if a veteran has a combined service connected disability rating of 100% and is deemed to be permanently and totally disabled, as certified by the United States Department of Veterans Affairs, the taxpayer who has been granted an exemption under this Section shall no longer be required to reapply for the exemption on an annual basis, and the exemption shall be in effect for as long as the exemption would otherwise be permitted under this Section.”