Alabama Income Tax Exclusion for VA Military Disability Ret…

Alabama Income Tax Exclusion for VA Military Disability Retirement Pay

Alabama Department of Revenue

Full exclusion from taxable income

Disability retirement pay you receive for an injury or illness that resulted from active service is not counted as taxable income. This also covers VA disability compensation and pension payments, grants for a wheelchair accessible home, grants for a vehicle if you lost your sight or the use of a limb, and dependent care assistance benefits.

Check eligibility

How to apply

There is nothing to apply for. Leave these payments out of the income you report on your Alabama return.

What you'll need

Your VA award letter showing the payments and what they are for.

Eligibility

You are an Alabama resident filing an Alabama income tax return
You receive military disability retirement pay or another VA disability benefit for an injury or illness resulting from active service

Source

Official source

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