State veteran benefits · IA
Iowa Veteran Benefits
Iowa's Disabled Veteran Homestead Credit pays 100% of the property tax on the home of a 100% disabled service-connected veteran, and DIC recipients qualify too.
By Mario Bailey, U.S. Air Force veteran · current Air National Guard member. Data updated 2026-07-10.
What Iowa adds, benefit by benefit
Your federal VA benefits travel with you to any state. Everything below is the second stack: what Iowa itself offers, each item checked against the state's own official source on the date shown.
Disabled Veteran Homestead Credit and military exemption
Iowa's Disabled Veteran Homestead Tax Credit provides a 100% exemption of property taxes for 100% disabled service-connected veterans, and recipients of Dependency and Indemnity Compensation qualify as well. Veterans below that threshold still get the Military Service Property Tax Exemption, which drops the assessed value of the home by up to $4,000.
Both run through the county assessor. The homestead credit follows the VA determination, so an increase to 100%, including permanent unemployability paid at the 100% rate, is the trigger to file.
SOURCE: Iowa Department of Veterans Affairs · retrieved 2026-07-10
Income tax on military retired pay
Iowa Code sections 422.7(31A) and (31B) exclude military retirement benefits from Iowa individual income tax regardless of the taxpayer's age, and the exclusion covers military survivor benefits received under 10 U.S.C. 1447. VA disability compensation is not taxed by Iowa or anywhere else.
The military exclusion sits on top of Iowa's general retirement income exclusion for taxpayers 55 and older, and military retirement pay does not count toward the filing threshold.
SOURCE: Iowa Department of Revenue · retrieved 2026-07-10
Children of Fallen Iowa Service Members Scholarship
Children of service members who died in an active military status since September 11, 2001, where the service member was an Iowa resident at entry and at death, can receive scholarships covering tuition, fees, books, housing, and other required educational costs at Iowa postsecondary institutions. The death does not have to be combat related, and the aid stacks on top of federal programs like the Fry Scholarship.
Applications go to the Iowa Department of Veterans Affairs with an annual deadline of December 31.
SOURCE: Iowa Department of Veterans Affairs · retrieved 2026-07-10
State and local hiring preference
Honorably discharged Iowa resident veterans receive 5 preference points in state, county, and municipal hiring with a DD Form 214 showing character of service, and 10 points are available for veterans with a service-connected disability, a Purple Heart, or VA disability compensation or pension. Points are applied once to the final scores used to rank applicants for interview selection.
SOURCE: Iowa Department of Administrative Services · retrieved 2026-07-10
Iowa Veterans Home
The Iowa Veterans Home in Marshalltown is the state's long-term care facility for veterans, one of the larger state veterans homes in the country, with admissions handled directly by the facility.
SOURCE: Iowa Department of Veterans Affairs · retrieved 2026-07-10
Lifetime hunting and fishing license
Iowa residents who served on active federal service and were disabled during that service, and former POWs, can get a lifetime hunting and fishing license for a $7 fee, issued through the Iowa DNR.
SOURCE: Iowa Department of Veterans Affairs · retrieved 2026-07-10
Iowa Veterans Cemetery
The Iowa Veterans Cemetery in rural Dallas County, just west of Des Moines, buries honorably discharged veterans at no charge, with a $300 fee for spouses and eligible dependents.
SOURCE: Iowa Department of Veterans Affairs · retrieved 2026-07-10
Injured veterans and homeownership grants
Iowa pays an Injured Veterans Grant of up to $10,000 to service members seriously injured after September 11, 2001, and a $5,000 Homeownership Assistance grant to eligible post-9/11 service members and veterans who purchased a qualifying Iowa home after March 10, 2005.
SOURCE: Iowa Department of Veterans Affairs · retrieved 2026-07-10
For a 100% rated veteran deciding where in the Midwest to put down roots, Iowa’s pitch is arithmetic: the state pays your entire property tax bill through the homestead credit, your military pension arrives untaxed at any age, and your closing costs on the house get a $5,000 state grant if your service is post-9/11. Stack those on a Des Moines-area cost of living and Iowa quietly beats several states with flashier reputations for veteran friendliness.
The homestead credit’s fine print rewards attention. It is not limited to schedular 100% ratings; unemployability paid at the 100% rate and surviving spouses drawing DIC both qualify, two groups who routinely assume they do not. The credit does not apply itself, either. It starts the assessment year you file with the county assessor, so a veteran whose rating just went to 100% should file the same season, not at tax time. If you are unsure where your combined rating actually lands, the rating calculator is the place to check before calling the assessor.
Below 100%, honesty requires saying the property benefit is modest: $4,000 off assessed value trims, not transforms, a bill. The mid-rating veteran’s best Iowa benefits are instead the untaxed pension, hiring preference points that apply across state, county, and city jobs (the federal preference is its own separate system), and the $7 lifetime license, one of the cheapest lifetime sporting licenses in the country for disabled veterans.
Iowa’s education story is aimed at survivors rather than veterans themselves. The Children of Fallen Iowa Service Members Scholarship covers the full cost stack at Iowa schools and explicitly rides on top of the federal Fry Scholarship, so a Gold Star family should file both rather than choosing. Veterans working on their own degrees lean on the Post-9/11 GI Bill with Iowa’s mandated in-state rates.
The most commonly missed item is the Injured Veterans Grant: up to $10,000 for post-9/11 serious injuries, separate from VA compensation, which is itself never taxed, as explained in is VA disability taxable. Families in the medevac whirlwind rarely hear about it; if that was you, it is worth a call to Camp Dodge even years later.
Where to apply
State benefits are administered by the state, not by VA, so the applications above run through Iowa Department of Veterans Affairs or the specific agency named in each source link. A free VA-accredited representative or VSO in Iowa will know both stacks, the federal claim and the state paperwork, and charges nothing to help with either.