Disability retirement pay you receive as a pension, annuity or similar allowance for an injury or illness that resulted from active service is not counted as taxable income. The same treatment covers VA disability compensation and pension payments, grants for a home designed for wheelchair living, grants for a vehicle if you lost your sight or the use of a limb, and benefits under a dependent care assistance program.
There is nothing to apply for. Leave these payments out of the income you report on your Iowa return.
Your VA award letter showing the payments and what they are for.
