Disabled Veteran Benefits in Iowa

The Disabled Veteran Homestead Tax Credit is equal to 100% of the tax levied on your homestead. You qualify with a permanent service-connected rating of 100%, or a permanent and total rating based on individual unemployability paid at the 100% rate. There is no income test and no limit on the home's value. A surviving spouse who receives DIC qualifies too, and keeps the credit after remarrying.

One change matters if you have not applied yet. For applications made on or after July 1, 2026, the credit covers the house and up to one-half acre, with no outbuildings; owners who applied before that date are not affected. File the application (Form 54-049) with your assessor by July 1, along with the regular homestead exemption form. You do not reapply each year.

Below 100%, the Military Service Property Tax Exemption takes $4,000 off the taxable value of your property if you served at least 18 months, or less if you were discharged for a service-related injury. The law sets no disability rating for it. A veteran who takes the disabled veteran credit cannot also have this exemption.

Iowa has excluded military retirement benefits from its individual income tax since tax year 2014, at any age. The exclusion also covers military survivor benefits, and it applies to nonresidents as well as residents.

It comes on top of Iowa's general pension exclusion for taxpayers 55 and older. Military retirement pay is also left out of the filing threshold, so it will not by itself make you file an Iowa return.

The license is the one a rating unlocks. Veterans with a permanent service-connected disability rating of 100% pay no fee for an ordinary driver's license or a motorcycle license. Show the Iowa DOT your VA Summary of Benefits letter once and the waiver carries over to every renewal.

The Disabled Veteran (DV) plate is different. Iowa issues it, with no plate cost and no annual registration fee, only to a seriously disabled veteran who received federal financial help to buy that vehicle. Eligibility follows the vehicle, not the veteran. The plate lets you park free in any city-owned lot or metered space in Iowa, but not in accessible spaces.

A veteran discharged under honorable conditions can get the Veteran plate: one set at no charge, then $5 a year on top of normal registration. Adding the Veteran designation to a license you already hold costs $10.

Iowa sets no minimum percentage. The lifetime license is for residents who served on federal active duty and have a service-connected disability or were prisoners of war, and state law defines disabled as simply being entitled to a service-connected rating, so 10% counts the same as 100%. The state's fee schedule prices it at $5; the Iowa Department of Veterans Affairs quotes $7.

Any Iowa resident who served on federal active duty, rated or not, can instead buy the annual fishing or combination license for $5 plus a $2 processing fee. Veterans with a 100% rating can also buy a lifetime trout license.

The Military Homeownership Assistance Program is a $5,000 grant for down payment and closing costs. You need 90 days of active duty between August 2, 1990 and April 6, 1991, or since September 11, 2001. No rating is required, but you must be approved before closing, and the program is limited to the funding available.

The Injured Veterans Grant pays up to $10,000, in $2,500 steps, to a service member or veteran seriously injured in the line of duty in a hazardous area after September 11, 2001.

The Iowa Veterans Trust Fund is the safety net: dental, vision and hearing care, prescription drugs, medical equipment, and up to $5,000 of job retraining. Household income may not exceed 300 percent of the federal poverty guidelines, VA disability pay counts as income, and liquid assets over $20,000 rule you out. Apply through your County Veterans Service Office.

The Iowa Veterans Home in Marshalltown admits honorably discharged Iowa veterans and their spouses who need residential or nursing care. Cost is normally worked out from each resident's income and assets. The exception: if the VA rates you 70% or higher and you need nursing care, there is no out-of-pocket expense.

At the Iowa Veterans Cemetery, eligible veterans are interred for free. There is a $300 interment fee for a spouse or dependent child, and you do not have to live in Iowa. The pre-need application is free and commits you to nothing.

The two state programs for veterans' children are both tied to a parent's death in service, not to a disability rating.

If a parent died on or after September 11, 2001 during active federal military service, war orphans educational assistance pays up to the highest resident undergraduate tuition rate at Iowa's state universities each year, for a student who starts college before age 26. The Children of Fallen Iowa Service Members Scholarship helps with costs like tuition, books, fees and housing; the death does not have to be combat-related.

Veterans themselves can ask the Veterans Trust Fund for up to $5,000 toward retraining or college if they are unemployed or underemployed.