Disabled Veteran Property Tax Exemption in Indiana (2026)

Last reviewed August 25, 2026. Every figure, form and deadline on this page is re-checked against the state’s own government sources once a quarter, and the date above is updated when we do it.

Indiana just rewrote its disabled veteran property tax benefit. If you have a total disability, the state now deducts 100% of your home’s assessed value, starting with the 2026 assessment date (bills you pay in 2027). If your rating is less than total, you get a flat credit of $350 or $250 instead, depending on your service period and age. This replaced the old $14,000 and $24,960 deductions that most sites, and some county pages, still quote.

House Enrolled Act 1210-2026 made this change. Below is what applies now, what the old numbers were, and how the state’s own transition rule moves people from the old benefit to the new one.

How much is the Indiana benefit worth?

Who you are	Benefit	Statute
Total disability, evidenced by a VA pension certificate, VA award of compensation, or an IDVA certificate of eligibility	100% of assessed value deducted, no cap	IC 6-1.1-12-14
Served during a recognized wartime period, honorably discharged, service-connected disability of at least 10%	$350 credit	IC 6-1.1-51.3-6
At least 62 years old, honorably discharged, disability of at least 10% (wartime service not required)	$250 credit	IC 6-1.1-51.3-5
Surviving spouse of a WWI veteran (service before November 12, 1918)	$18,720 of assessed value deducted	IC 6-1.1-12-16
Veteran, disability of at least 50%, whose home was donated by a tax-exempt nonprofit	50% to 100% of assessed value, by disability tier	IC 6-1.1-12-14.5

The 100% deduction and the two flat credits are the ones that matter for most disabled veterans. You can hold both the $350 and $250 credits at the same time if you separately qualify for each, and the Department of Local Government Finance’s own FAQ confirms that. What you cannot do is combine the 100% deduction with any Chapter 51.3 credit. Indiana Code 6-1.1-12-14(d) is explicit that an individual who receives the 100% deduction may not also receive a local property tax credit under Chapter 51.3.

Why the internet still says $14,000 and $24,960

Those were real numbers, just not current ones. Indiana Code 6-1.1-12-14 used to cap the totally disabled veteran’s deduction at $14,000 (with a $240,000 assessed value ceiling to even qualify), and a separate provision, Indiana Code 6-1.1-12-13, gave wartime veterans rated 10% or higher a flat $24,960 deduction. House Enrolled Act 1210-2026 rewrote section 14 into the full 100% deduction, removed the assessed value ceiling, and created the two new Chapter 51.3 credits to cover veterans who are not totally disabled. Section 13’s old $24,960 deduction still sits in the code, but it now only applies to property taxes assessed before January 1, 2026, and the section itself expires January 1, 2028. Guides, county pages and even the Department’s own August 2025 benefits chart that predate this law still show the old figures.

The 2026 transition, if you already had the old deduction

If you were receiving the old $14,000 deduction for either reason (total disability or 62-plus with 10%), the Department of Local Government Finance’s own guidance says your county auditor must not carry that deduction forward. For 2026 Pay 2027, the auditor instead applies the $250 credit automatically. If you are totally disabled and want the new 100% deduction instead of the $250 credit, you have to file a new application, you are not moved there automatically. If you were receiving the old $24,960 deduction, the law does not require an automatic switch to the $350 credit, though the Department recommends counties do it as a courtesy. Call your county auditor to confirm what happened on your account.

Who qualifies in Indiana?

For the 100% deduction (IC 6-1.1-12-14) you need all of these:

• Served in the U.S. military or naval forces for at least 90 days (wartime service is not required for this one).
• Received an honorable discharge.
• Have a total disability, evidenced by a VA pension certificate, a VA award of compensation, or an IDVA certificate of eligibility. The statute does not say the disability has to be service-connected.
• Resided in Indiana for at least one year before the assessment date you are claiming for.
• Own the home, or be buying it under a recorded contract, and use it as your principal residence, on the date you file.

The Department’s own FAQ treats “principal place of residence” using the same one-acre homestead safe harbor Indiana already uses elsewhere, and says the deduction is not automatically limited to a single parcel if your residence spans more than one. Trusts can no longer receive this specific deduction. House Enrolled Act 1210-2026 removed that option, though a trust can still hold some of the Chapter 51.3 credits.

The $350 credit

Served during a recognized U.S. war, honorably discharged, and a service-connected disability of at least 10%. This one does require wartime service and does require the disability to be service-connected, unlike the 100% deduction.

The $250 credit

Served at least 90 days, honorably discharged, at least 62 years old, and a disability of at least 10%. No wartime service requirement here.

Surviving spouses

A surviving spouse can keep the 100% deduction if the veteran met the requirements at the time of death and the spouse owns or is buying the home when the deduction is filed, as long as the spouse has not remarried. The $350 credit works the same way. The $250 credit is slightly broader: a surviving spouse can also qualify if the veteran was killed in action, died on active duty, or died in inactive duty training, even if the veteran had not yet met the age-62 requirement.

Can the benefit be used before closing?

Better than most states, but your lender still has a say. Indiana does not test ownership on a fixed date like January 1. Eligibility for the deduction and both credits is tested on the date you file the statement, which has to be on or before January 15 of the year the taxes are first due and payable. The Department of Local Government Finance’s own FAQ works through this exact scenario: buy a home on September 1, 2026, and you can file for the 2026 Pay 2027 tax year on or before January 15, 2027, as long as you otherwise qualify, including the one-year Indiana residency requirement for the 100% deduction. That means a purchase this year can reach next year’s tax bill, instead of waiting an extra full cycle the way some other states require.

That said, there is no retroactive filing. Miss January 15 and you wait for the next tax year, full stop. And the one-year Indiana residency requirement only applies to the 100% deduction, not to the $250 or $350 credits, so if you are moving to Indiana for the first time, the credits are available sooner than the full deduction.

Four states put a pre-purchase determination in the statute. Indiana is not one of them

State rule. Four states let a qualifying veteran get something in writing from the taxing authority before they own the home:

• Virginia: file the normal exemption paperwork plus documentation of the purchase agreement and the commissioner of the revenue must process it and send an approval or denial letter, with the exemption amount, within 20 business days. Va. Code § 58.1-3219.6(B). The exemption itself takes effect only after you become the owner.
• Maryland: you may apply for a specific dwelling you intend to purchase, and the Department of Assessments and Taxation must send a preliminary approval or denial, with the amount, within 15 business days. Md. Code, Tax-Property § 7-208(d)(5). No second application is needed once you own it.
• Utah: a qualifying disabled veteran claimant may apply before owning the residence with a real estate purchase contract, filed in the county where the home sits, and the county must send a receipt with preliminary approval or denial and the calculated amount within 15 business days. Utah Code § 59-2a-502(5).
• Alabama: for closings on or after October 1, 2026, the tax assessing official issues a tentative certificate of permanent and total disability before purchase, within 20 days, and the statute says a settlement agent or loan closing officer may not consider the homestead ad valorem taxes when calculating debt-to-income once you hand over that certificate. Ala. Code § 40-9-21.3.

One correction worth having, because it gets repeated a lot: outside of Alabama these laws bind the county or the state tax office, not your lender. They force the taxing authority to answer you in writing before closing. They do not order a lender to waive or exclude the tax. Alabama is the only one of the four that reaches into the loan file itself. North Carolina has a bill that would add a prequalification process, House Bill 94, which passed the House 112 to 0 in May 2025 and has sat in Senate Rules since. It is not law, so do not plan around it.

In Indiana it is a lender decision, so shop it

Lender overlay and market practice. There is no Indiana statute telling the taxing authority to pre-approve you before you own the home, so whether this benefit helps you qualify comes down to lender policy. Here is what that looks like in practice, from lender guidance we collected directly in August 2026:

• Some lenders will use the reduced tax figure before closing, and some will not. One wholesale lender told us plainly it will consider a veteran real estate tax exemption and a reduced property tax number in the qualifying payment, as long as underwriting gets the local exemption rules and proof you meet them. If the documentation is short, underwriting uses the full tax amount instead. Another wholesaler checks it state by state and county by county on every single closing. If your lender says no, that is not the final answer on the benefit. It is that lender’s answer. Ask another one.
• Every lender will require proof of eligibility if the lower tax is doing work in your file. If the reduced tax is what lowers your debt ratio or raises your residual income, expect to document it: your VA rating decision or award letter showing the qualifying disability, the taxing authority’s own published exemption rules, and usually the completed exemption application. One lender’s VA guide requires proof of 100 percent disability from VA plus a copy of the completed county application for property tax exemption, and where the application has to be notarized it takes an unsigned copy up front and conditions it to be signed at closing.

Lender overlays apply everywhere. State permission is not lender permission. One large investor allows the anticipated reduced tax for qualifying only for primary residences in California, Florida, Maryland, Texas, Utah and Virginia, and only with proof the veteran applied to the taxing authority before the note date. Indiana is not on that list.

Practically, ask your loan officer two questions before you write an offer: will you use a reduced tax figure to qualify me, and will you waive the tax escrow. Different lenders give different answers on the same file, and that is normal, not a mistake.

What we can do instead: waive the escrow

If the exemption cannot be counted yet, the fallback is to not escrow the taxes at all, so your monthly housing expense is not carrying twelve months of a tax bill that is about to shrink. VA does not require escrows, so this is a lender and investor decision, and many will allow it on a strong file. There are lenders that will waive the tax escrow on a VA loan even when the property taxes have not been waived yet, so this is a real option and not a rare favor. Some will waive it with no restrictions at all, others want the eligibility proof and the correct paperwork in the file first. Waiving escrow does not require the taxing authority to approve anything, which is why it is usually the easier ask of the two. Understand the tradeoff: with no escrow account, you pay the taxing authority directly and you are on your own for those tax bills until the exemption is actually approved, and approval can take a while. Budget for it and pay the bill on time; a delinquent tax bill on a home you just bought is an expensive way to save a few dollars of monthly payment.

One more VA rule to know, because it runs the other way. On estimating taxes, Chapter 4 says “If taxes are expected to increase, use the increased amount.” There is no matching VA instruction that lets an underwriter write down your taxes, which is why the reduction is always a lender option and never a VA entitlement. The Chapter 4 text is here if you want to read it.

Plan for the gap between closing and approval

These applications take a while to process, and the taxing authority’s calendar does not wait for your loan. A tax bill can come due between your closing date and the day your exemption is approved, and you are the owner, so that bill is yours. That can include taxes attributable to the period the prior owner held the home. One lender’s VA guide makes it explicit and requires a signed letter of explanation from the veteran borrower stating they are solely responsible for the property taxes owed for the prior owner. Keep the money set aside and do not assume the first bill will be reduced, especially if you waived escrow and Indiana is billing you directly.

How to apply in Indiana, step by step

1. Get State Form 12662, Application for Property Tax Benefits for Disabled Veterans and Surviving Spouses of Certain Veterans, from the Indiana Department of Local Government Finance (PDF download) or your county auditor’s office.
2. Check the right box. Section I is the 100% total disability deduction. Section II is the $350 wartime credit. Section III is the $250 age-62 credit. Section IV is the WWI surviving spouse deduction. Section V is the homestead-donated-to-veteran deduction. You can check more than one, except that Section I cannot be combined with Section II, III, or V.
3. Attach your evidence. A VA pension certificate, a VA award of compensation (a VA disability compensation check also works for the $350 credit specifically), or a certificate of eligibility from the Indiana Department of Veterans’ Affairs. IDVA’s Section VIII verification is optional. You do not need it if your VA paperwork is enough on its own.
4. File it with your county auditor, or mail it to Indiana Department of Veterans’ Affairs headquarters at 777 North Meridian Street, Suite 300, Indianapolis, IN 46204, which will route it to the right county. Use the Department of Local Government Finance’s county-by-county directory to find your county auditor’s contact information directly.
5. Watch the deadline: January 15 of the calendar year the property taxes are first due and payable. Mailed applications must be postmarked by that date. There is no late or retroactive filing for a missed year.
6. You generally do not refile every year once approved, as long as you stay eligible. The one exception is the 2026 transition described above: if your old $14,000 deduction was converted to the $250 credit, you must file a fresh application to move up to the 100% deduction.

Can you get a refund of prior year taxes?

No, and this is where Indiana is stricter than some states. The Department of Local Government Finance’s own FAQ is blunt about it: if you miss the January 15 deadline for a given tax year, you cannot apply for that deduction or credit retroactively. Ohio and a few other states allow a one-year late application with a refund. Indiana does not have that safety valve for this benefit. If you find out in March that you qualified for a tax year that already passed its filing deadline, that year is gone. The only thing you can do is make sure you are filed correctly for the current year, on or before the next January 15.

The one place Indiana does look backward is the ownership carryover in Indiana Code 6-1.1-12-45. If you had the 100% deduction properly in place on a property and then sell it, the deduction stays applied to the taxes based on that assessment for up to one year after the sale, even though you no longer own the home. That is a narrow, specific carryover, not a general grace period, and it does not help a veteran who simply forgot to file.

Other Indiana programs for disabled veterans

The property tax benefit is the biggest one, but Indiana runs several others worth knowing about. All of these are state programs unless labeled otherwise.

• Vehicle excise tax credit for veterans without qualifying property (state). If you do not own property that could carry the section 13 or 14 deduction, Indiana Code 6-6-5-5.2 gives you a credit against vehicle excise tax equal to the lesser of your excise tax bill or $70 per vehicle, for up to two vehicles. You claim it on a Bureau of Motor Vehicles form with a county auditor affidavit confirming you do not own qualifying property.
• Hunting and fishing license fee reduction (state). The Indiana Department of Veterans’ Affairs lists a reduced-fee hunting and fishing license for disabled Hoosier veterans.
• Remission of fees for children of a disabled veteran (state). IDVA also administers free or reduced tuition at Indiana public colleges for the children of certain disabled veterans.
• County Veteran Service Officers (county). Every Indiana county has one. They help file the property tax paperwork, VA claims, and connect veterans with emergency assistance. Start there if you are not sure which form applies to your situation.
• Over-65 and blind/disabled local credits (state, stackable). Indiana’s separate Over-65 credit ($150, income tested) and Blind/Disabled credit ($125) are not veteran-specific, but they can be claimed alongside the veteran benefits if you separately qualify for them.
• Adapting a home for a service-connected disability (federal). VA’s Specially Adapted Housing and Special Home Adaptation grants, and the smaller HISA grant, pay to build or modify a home for certain service-connected disabilities. These are federal VA benefits, not Indiana programs, and they can be used alongside a VA loan.

Indiana disabled veteran property tax FAQs

How much is Indiana’s disabled veteran property tax benefit in 2026?

If you have a total disability, Indiana now deducts 100% of your home’s assessed value, starting with the 2026 assessment date (the tax bill you pay in 2027). If your disability is rated less than total, you get a flat credit instead: $350 if you served during a war and are rated at least 10%, or $250 if you are 62 or older with at least a 10% rating.

Why do I keep seeing $14,000 or $24,960 for Indiana?

Those were the old numbers. Indiana Code 6-1.1-12-14 used to cap the totally-disabled deduction at $14,000, and Indiana Code 6-1.1-12-13 gave wartime veterans rated 10% or more a $24,960 deduction. House Enrolled Act 1210-2026 rewrote section 14 into a full 100% deduction and moved the smaller benefits into new flat credits. Section 13 still exists in the code but only applies to assessment dates before January 1, 2026, and it expires entirely on January 1, 2028. Most articles and even some old county pages have not caught up.

Do I need a 100 percent VA rating to get the full deduction?

You need a total disability as Indiana defines it for this deduction, documented by a VA pension certificate, a VA award of compensation, or a certificate of eligibility from the Indiana Department of Veterans’ Affairs. The statute does not say the disability has to be service-connected, so a total non-service-connected VA pension can also support this deduction. A partial rating, even a high one, does not qualify you for the 100% deduction. It qualifies you for one of the flat credits instead.

Can I get both the $250 and $350 credits?

Yes. The Department of Local Government Finance’s own FAQ says a veteran who separately qualifies for both may receive both. You cannot combine either credit with the 100% deduction on the same individual’s claim. If you get the 100% deduction, Indiana Code 6-1.1-12-14(d) blocks you from also claiming a Chapter 51.3 credit.

Is there an income limit or assessed value cap?

No. House Enrolled Act 1210-2026 removed the old $240,000 assessed value ceiling from the total disability deduction. There is no income test on any of these benefits.

Can a surviving spouse keep the benefit?

Yes, for the deduction and for both credits, as long as the veteran met the requirements at the time of death (or was killed in action, died on active duty, or died in inactive duty training, for the $250 credit and the deduction) and the surviving spouse owns or is buying the home when the claim is filed. The surviving spouse loses the 100% deduction if they remarry.

Can I use the deduction on a home I’m buying this year?

Indiana tests ownership on the date you file the statement, not on a fixed date like January 1. Buy a home in 2026, and the Department of Local Government Finance’s own guidance says you can file by January 15, 2027 and get the deduction on the tax bill due in 2027, as long as you meet the one-year Indiana residency requirement and the other eligibility rules. That is faster than several other states, though your lender still decides whether to count the lower payment before closing.

What if I miss the January 15 deadline?

There is no retroactive fix. The Department of Local Government Finance’s FAQ is direct about this: a person who misses the statutory deadline may not apply for the deduction or credit for that year retroactively. Mark the date.

Where to go next

• Disabled Veteran Property Tax Exemption Guide, every state’s exemption, form and deadline in one directory
• Bad credit VA loans in Indiana
• Property tax discounts for veterans on VA disability, the national overview
• Funding Fee Waivers and Refunds Guide, the fee is waived outright at a 10 percent rating or higher, and can be refunded if you already paid it
• VA loans with Carlos Scarpero
• Indiana DLGF, 2026 Legislative Update: Veterans Deductions and Credits FAQ (PDF download)
• Indiana Code 6-1.1-12-14, the 100% deduction statute, and 6-1.1-51.3-5 and -6, the two new credits
• Directory of all 92 Indiana county auditors