Disabled Veteran Homestead Property Tax Credit
On March 5, 2015 Governor Branstad signed in to law House File 166, an Act relating to the disabled veteran homestead tax credit. The bill modifies eligibility criteria to include disabled veterans with permanent and total disability ratings based on individual unemployability paid at the 100% disability rate.
If you are 100% unemployable and have not applied:
Provide your tax credit application to your local assessor on or before July 1.
Frequently Asked Questions
1. Filing Questions
2. Application Process
3. Applicants Receiving Other Tax Credits
4. DD214 Questions
5. Disability Questions
6. Documentation Questions
7. Property Questions
8. Surviving Spouse or Dependent Questions
1.1 Has this changed to an annual sign up?
No, after much discussion with VA representatives and others 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.
1.2. 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The income requirement is no longer applicable therefore an annual reapplication is not necessary.
1.3. 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.
2.1. What is the filing deadline?
The filing deadline for the application is July 1st of the current assessment. Applications received after July 1st would apply to the following assessment year.
Yes, all supporting documentation must be within the last 12 months.
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.
DIC payments are Dependency and Indemnity Compensation payments to surviving spouses and dependents.
2.5. Can a spouse of a 100% disabled service related veteran sign the application for his or her husband?
Under Iowa Statutes 425.2 the spouse or a member of the veteran's family may sign the application.
3.1. If we get a new application, and the applicant has previously applied for a homestead and/or military exemption do we remove that credit and/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. If the applicant does not qualify for the disabled veteran additional homestead benefit and had been receiving a homestead prior to this additional benefit in future years, the applicant would be entitled to receive their original homestead without reapplication.
4.1. If the DD214 is recorded in our county can we just use the book and page as evidence, or must we attach a copy of the DD214 to the application. Many vets are not comfortable with giving us the form even if we redact the SS number.
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.
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 Ch. 426A requires the documentation be recorded, so we can assume that is not a requirement for the DVTC because the law is silent. Once the veteran has provided documentation of the DD214 they no longer need to provide this evidence.
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.
5.1. I receive 100% compensation because I have 100% individual un-employability. Do I qualify for the exemption?
Yes. On March 5, 2015 Governor Branstad signed in to law House File 166, an Act relating to the disabled veteran homestead tax credit. The bill modifies eligibility criteria to include disabled veterans with permanent and total disability ratings based on individual unemployability paid at the 100% disability rate.
6.1. What kinds of documentation are acceptable?
1a: If they qualify under 1a; USC Chapter 38 they would have to provide documentation that they received assistance in purchasing or remodeling their property USC 21.801, 21.802 or 2101, 2102.
1b, 1c: For persons qualifying under 1b or 1c verification from the US Department of Veterans Affairs indicating a permanent rating combined total 100% service connected disability or permanent and total disability ratings based on individual unemployability paid at the 100% disability rate. A Benefits Summary Letter is sufficient documentation. They would also have to provide a DD214 with the initial application to show that they meet the requirements of section 35.1.
1d: The owner of the homestead if a surviving spouse or child receiving DIC payments qualifies under 1d of the new language and documentation of DIC payments is sufficient to qualify.
2a: If a veteran qualifies under 1a, 1b or 1c, their surviving spouse as the beneficiary of the veteran’s estate may continue to receive the credit unless the surviving spouse remarries or changes homesteads.
6.2. It seems to be an issue to get a letter dated within the past 12 months from the local VA office. I've talked to our local VA about this and they indicated there is only one letter issued. They are willing to assist veterans to get a current letter but don’t know how this can be accomplished.
The local VA or the veteran can call 800-827-1000 for assistance and request a current benefits rating letter.
7.1. 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 defines the amount of property that qualifies for homestead treatment and these same definitions apply 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.
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.
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. The language in 561.2 or 425.15 does not reference valuation limitations.
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.
Buildings on leased land do not qualify.
8.1. 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.
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 1d.
If they qualify under 1d and are receiving DIC, they are noted as the surviving spouse or child on the document.
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.