Disabled Veteran Homestead Property Tax Credit

Form: Disabled Veteran's Homestead Credit (54-049)
 

1. Filing Questions

Is annual reapplication required?
No, annual reapplication is no longer required. Instead, a notification to the assessor is required if a veteran or surviving spouse no longer qualifies for the credit.

I have a Disabled Veteran Tax Credit applicant who files yearly to show me income. Does the applicant need to file next year or can the current application carry on?
The income restriction is no longer required to receive the credit.

Can the assessor require annual reapplication?
No. However, the assessor may seek additional information as necessary to determine continued qualification, similar to all tax credits and exemptions.

2. Application Process

What is the filing deadline?
The filing deadline for the application is July 1. Applications received after July 1 would apply to the following assessment year.

I have received an application for the Disabled Veteran Tax Credit but the accompanying documentation is from 2007. Does supporting information need to be dated within the past 12 months?
Yes, all supporting documentation must be within the last 12 months.

Is a veteran’s application and supporting documentation a public record?
Applications for Disabled Veteran Tax Credits are public record. The applicant will need to be aware to limit the provision of private health related information and redact any social security numbers or information from the supporting documentation. However, under Iowa Code section 425.15(5), the list of the names and addresses of individuals granted a credit is generally considered confidential information.

What are DIC payments?
DIC payments are Dependency and Indemnity Compensation payments to surviving spouses and dependents.

Can a spouse of a 100% disabled service related veteran sign the application for his or her husband?
Under Iowa Code section 425.2(3), if the owner of the homestead is in active service in the armed forces of this state or the United States, or is sixty-five years of age or older, or is disabled, the application may be signed and delivered by any member of the owner’s family, by the owner’s guardian or conservator, or by any other person who may represent the owner under power of attorney. If the owner of the homestead is married, the spouse may sign and deliver the application.

3. Applicants Receiving Other Tax Credits

If the assessor receives a new application, and the applicant has previously applied for a homestead credit or military exemption, should the assessor remove that credit or exemption?
A qualifying person who elects to secure the credit provided in this section is not eligible for any other real property tax exemption provided by law for veterans of military service. Iowa Code § 425.15(3). If the applicant does not qualify for the disabled veteran additional homestead credit and had been receiving a homestead credit previously, the applicant would be entitled to receive their original homestead credit without reapplication.

4. DD214 Questions

If the DD214 is recorded in a county can the assessor just use the book and page as evidence, or must the applicant attach a copy of the DD214 to the application?
If the assessor verifies the DD214 is recorded and that the document is for the applicant noting the book and page on the application would be sufficient.

Does the veteran need to have their DD214 discharge papers recorded in the county they are claiming the Homestead Credit? 
There is no requirement that the supporting documentation that accompanies the application for the Disabled Veteran Tax Credit be recorded. The Military Service exemption under Iowa Code chapter 426A requires the documentation be recorded. Once the veteran has provided documentation of the DD214 they no longer need to provide this evidence.

If assessors need to have an applicant’s DD214, should assessors have a place to put the recording book & page like the military exemption form? Or do assessors attach a copy of the DD214 to the form?
The assessor could document the book and page in the assessor portion of the application if it is recorded in the county in which the applicant is applying. If the document is not recorded a copy of the DD214 will need to accompany the first application.

5. Disability Questions

An applicant receives 100% compensation because they have 100% individual unemployability. Do I qualify for the credit?
Yes. On March 5, 2015 Governor Branstad signed into law House File 166, an Act relating to the disabled veteran homestead tax credit. The bill modified eligibility criteria to include disabled veterans with permanent and total disability ratings based on individual unemployability paid at the 100% disability rate, as certified by the United States Department of Veterans Affairs. The applicant would need to meet all additional requirements to qualify for the credit.

6. Documentation Questions

What kinds of documentation are acceptable?
For persons applying for the disabled veteran tax credit under Iowa Code section 425.15(1)“a,” “b,” and “c,” a DD-214 (Certificate of Release or Discharge from Active Duty), or an equivalent document indicating the veteran’s type of separation and character of service, is required with an application for the credit to verify that the applicant meets the requirements of Iowa Code sections 425.15 and 35.1.

For persons applying for the disabled veteran tax credit under Iowa Code section 425.15(1)“b” and “c,” a U.S. Department of Veterans Affairs Benefit Summary Letter (also known as a Veterans Affairs award letter) stating the veteran’s qualifying service-connected disability rating(s) is required with an application for the disabled veteran tax credit as certification of the veteran’s service-connected disability by the U.S. Department of Veterans Affairs. Where a veteran seeks eligibility as a result of a permanent and total disability rating based on individual unemployability, the Benefit Summary Letter must also indicate that the veteran is entitled to individual unemployability that is compensated at the 100 percent disability rate.

A person who has received a non-qualifying character of discharge may still qualify for the disabled veteran tax credit if it is established through the required documents that the person has a service-connected disability that is related to the person’s service in the armed forces of the United States for which the person was discharged under honorable conditions, and the other requirements of Iowa Code section 425.15 and this rule are also met. In such a case, in addition to a DD-214, the applicant must include a DD 256 (Certificate of Honorable Discharge), a DD-257 (General Discharge Certificate), or an equivalent document from the relevant time of service with the application for the disabled veteran tax credit. The applicant’s Benefit Summary Letter must also indicate the applicant’s periods of service and each character of discharge.

How can the local VA or veteran get help receiving the required documentation?
The local VA or the veteran can call 800-827-1000 for assistance and request a current benefits rating letter. 

7. Property Questions

Can the credit only be applied to the 40 acres with the house even if they own more acres? Many of our agricultural parcels have been re-platted into legally described lots that end up being much smaller or much larger than 40 acres.
Iowa Code section 561.2 sets forth the amount of property that qualifies for homestead treatment. That section also applies to the Disabled Veteran Tax Credit. For properties located within city limits the maximum size is 1/2 acre where the home and the buildings if any are located. For properties located outside the city limits the maximum size is 40 acres which includes the house and any buildings. In either case, if the valuation is less than $500 it may be enlarged until it reaches that amount. The Disabled Veteran Tax Credit would only apply to the home in which the applicant lives. Any other dwellings on the property would not qualify.

Our ag dwellings are a separate record. Does this exemption apply to just that parcel or would it also apply to the ag land parcel (including out buildings) that the dwelling sits on? 
The Disabled Veteran Tax Credit would apply to both the land and out buildings up to 40 acres. It would not apply to any other dwellings on the property except for the dwelling in which the applicant lives.

Is there any limit on the value of the homestead? 
The size of the homestead is limited to 1/2 acre in the city limits and up to 40 acres outside of the city limits. However, there is not a valuation limitation in Iowa Code. 

Can a disabled veteran receive the credit if they are not the owner of the home?
The veteran must be an owner to qualify for the credit. If the property is only in the spouse’s name the property would not qualify for the credit because the veteran is not the owner.

Are homes sitting on land owned by someone else (building on leased land) eligible for the disabled veterans homestead credit? 
Buildings on leased land do not qualify.

8. Surviving Spouse or Dependent Questions

The surviving spouse of a qualifying veteran may qualify for the Disabled Veteran Tax Credit in one of two ways:

  • A surviving spouse who is the beneficiary of a qualified veteran's estate may continue to receive the credit already granted to the homestead until the spouse changes homesteads or remarries.
  • If the surviving spouse changes homesteads, or the homestead did not receive the credit during the qualified veteran’s life, the surviving spouse will need to provide a current DIC (Dependency and Indemnity Compensation) or CPD (Compensation and Pension Death) letter to receive the tax credit. A surviving spouse who receives DIC payments is eligible for the credit even upon remarriage.

Do surviving spouses that are receiving DIC payments qualify for the veteran’s homestead credit even if their spouse was not 100% service connected disability rating?
Yes, surviving spouses that are receiving DIC payments qualify for the credit. Receiving DIC payments means their spouses death was service connected. They are not required to have a 100% service connected disability rating as they qualify under Iowa Code section 425.15(1)(d).

Can a widow of a deceased veteran qualify if she doesn’t have the same last name as the veteran?
If the widow qualifies under Iowa Code section 425.15(1)(d) and is receiving DIC, they are noted as the surviving spouse or child on the document.

Can an adopted child of a deceased veteran receiving DIC payments receive the credit?
The adopted child would have to first be established as the owner of the property to qualify. If the child is not an owner they property would not qualify for the credit.