State veteran benefits · NC
North Carolina Veteran Benefits
North Carolina fully exempts military retired pay from state income tax for anyone who served 20 years or was medically retired, and layers a $45,000 property value exclusion on top for veterans with a permanent and total service-connected disability.
By Mario Bailey, U.S. Air Force veteran · current Air National Guard member. Data updated 2026-07-10.
What North Carolina adds, benefit by benefit
Your federal VA benefits travel with you to any state. Everything below is the second stack: what North Carolina itself offers, each item checked against the state's own official source on the date shown.
Disabled veteran property tax exclusion
North Carolina excludes the first $45,000 of assessed value of the permanent residence for an honorably discharged veteran with a permanent and total service-connected disability, or one who received specially adapted housing benefits under 38 U.S.C. 2101. There is no age or income limit. A never-remarried surviving spouse qualifies if the veteran had a permanent and total service-connected disability, received specially adapted housing benefits, or died from a service-connected condition.
The paperwork runs in a specific order: a Veterans Service Officer at a state or county veterans service office completes the certification on Form NCDVA-9 first, then the certified NCDVA-9 goes to the county tax office with Form AV-9 by June 1 of the tax year.
SOURCE: North Carolina Department of Military and Veterans Affairs · retrieved 2026-07-10
State income tax on military retirement
Retired members of the uniformed services who served at least 20 years, or who were medically retired under 10 U.S.C. Chapter 61, deduct all of their military retirement pay from North Carolina taxable income. Eligible Survivor Benefit Plan payments to beneficiaries are deductible on the same basis. VA disability compensation is excluded from federal adjusted gross income and never reaches the North Carolina return.
The deduction was created by Session Law 2021-180 and later expanded to cover retirement pay of qualifying NOAA and U.S. Public Health Service commissioned officers.
SOURCE: North Carolina Department of Revenue · retrieved 2026-07-10
Scholarship for Children of Wartime Veterans
Children under age 25 of qualifying deceased, disabled, combat, or POW/MIA wartime veterans can receive up to eight academic semesters at North Carolina schools, usable within eight years. Eligibility classes depend on the veteran's status, and the applicant must be domiciled in North Carolina, with the veteran a resident at enlistment or the child born and continuously resident in the state.
Funding is not guaranteed year to year: Spring 2026 awards were prorated to 25 percent of the Fall 2025 amounts because of limited funding, and the Fall 2026 application window ran May 6 to June 8, 2026. Apply as early as the window allows.
SOURCE: North Carolina Department of Military and Veterans Affairs · retrieved 2026-07-10
State employment preference
North Carolina grants state government employment preference to wartime veterans, spouses of disabled veterans, spouses or dependents of deceased veterans, and National Guard members. Senate Bill 1041, signed July 9, 2026, extends the preference to spouses of active-duty service members effective October 1, 2026; the state hosts more than 90,000 active-duty members and roughly 38,000 military spouses.
SOURCE: North Carolina Department of Military and Veterans Affairs · retrieved 2026-07-10
State veterans homes
Four skilled nursing state veterans homes are operating: Salisbury (99 beds), Black Mountain (100), Kinston (100), and Kernersville (120). The Fayetteville home closed after structural deficiencies were identified; the state is replacing it and helped its residents relocate.
SOURCE: North Carolina Department of Military and Veterans Affairs · retrieved 2026-07-10
State veterans cemeteries
North Carolina runs four state veterans cemeteries: Western Carolina in Black Mountain, Coastal Carolina in Jacksonville, Sandhills in Spring Lake, and Eastern Carolina in Goldsboro. There is no charge for the gravesite or interment services for a qualified veteran, government headstones are installed free, and a burial fee applies only for an eligible spouse or family member.
SOURCE: North Carolina Department of Military and Veterans Affairs · retrieved 2026-07-10
Lifetime hunting and fishing license
Resident veterans rated 50 percent or more disabled by VA can obtain the Lifetime Hunting and Fishing License for Resident Disabled Veterans, which stays valid for life as long as the rating remains at 50 percent or higher.
SOURCE: North Carolina Wildlife Resources Commission · retrieved 2026-07-10
The retiree math, and the edge cases it hides
Nobody retires out of Bragg or Lejeune without hearing that North Carolina stopped taxing military pensions, and that reputation is earned: for the standard 20-year retiree the deduction is total, no age test, no cap. But the statute’s two doors, 20 years or a Chapter 61 medical retirement, leave a real gap. A veteran who separated at 12 years without a medical retirement and later draws no military pension loses nothing, but a reservist with a small non-regular retirement should read the eligibility language before assuming the deduction applies. Meanwhile disability compensation stays out of the calculation entirely, on both the federal and state side, as covered in the guide on whether VA disability is taxable.
The property exclusion is where expectations need managing. Forty-five thousand dollars off assessed value is genuine money every single year, but it is an exclusion, not an exemption, and the threshold is binary: permanent and total. A veteran rated 90 percent gets nothing from it, which makes the difference between 90 and 100 P&T worth more in North Carolina than the federal pay tables alone suggest; the current rate tables show the federal side of that same cliff.
The mistake we see most is procedural. The NCDVA-9 is not a form you mail to the tax office cold; a Veterans Service Officer must certify it first, and the certified copy plus the AV-9 must land at the county by June 1. Miss the order or the date and you wait a year. The second miss is treating the children’s scholarship as an entitlement; the 2026 proration proved the fund can run short, so early application inside the window is not optional advice.
One more distinction worth keeping straight: the state hiring preference, freshly extended to active-duty spouses, lives in a different system from the federal points scheme explained in the veterans’ preference guide. Qualifying for one says nothing about the other, and a two-earner military household in Raleigh can often use both.
Where to apply
State benefits are administered by the state, not by VA, so the applications above run through North Carolina Department of Military and Veterans Affairs or the specific agency named in each source link. A free VA-accredited representative or VSO in North Carolina will know both stacks, the federal claim and the state paperwork, and charges nothing to help with either.