Beyond your federal VA disability compensation, North Carolina offers its own benefits for veterans — property tax, income tax, education, employment, vehicle, recreation, veterans home. Here's what North Carolina veterans can claim, who qualifies, and how to apply.
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Excludes the first $45,000 of appraised value of the permanent residence from property tax for honorably-discharged veterans with a 100% service-connected, permanent AND total VA disability, OR who receive 38 U.S.C. 2101 specially-adapted-housing benefits. No age or income limit. Also available to an unremarried surviving spouse. The statute requires a 'permanent and total' service-connected disability (effectively 100% P&T) rather than any lower percentage. Apply on Form AV-9 with VA certification Form NCDVA-9 by June 1.
Under the Bailey v. State settlement, federal/military retirement benefits are fully exempt from NC income tax if the retiree had 5 or more years of creditable service as of August 12, 1989. This is an alternative, older path that fully exempts qualifying pay regardless of total years served.
Effective tax year 2022, a retiree may fully deduct military retirement pay from NC taxable income if they served at least 20 years in the uniformed services OR were medically retired under 10 U.S.C. Chapter 61. No disability rating required for the 20-year path. Claimed on Form D-400 Schedule S. This is a full deduction (no dollar cap).
VA disability compensation is excluded from federal gross income and is therefore not included in federal adjusted gross income, which is the starting point for the NC return (Form D-400). As a result NC does not tax VA disability compensation. NC has a flat individual income tax. (NC does not publish a dedicated 'VA disability is exempt' page because it is excluded upstream at the federal AGI level; confidence high on the no-tax outcome, but the cited NC source is the general individual income tax / military filing page rather than a VA-disability-specific statement.)
Four-year (8-semester) scholarship for a child (under age 25, NC domiciled) of a deceased wartime veteran whose death was service-connected, or a veteran-related qualifying condition. At a State (public) institution the scholarship covers tuition plus a standard room allowance and standard board allowance; at a private institution it is a fixed monetary allowance set under G.S. 143B-1227(d). Class I-A is the fuller benefit tier.
Limited scholarship for a child of a living wartime veteran currently receiving compensation for a wartime service-connected disability rated 100% by the VA. Provides a more limited benefit set than Class I-A; if the veteran parent dies the award can convert to Class I-A.
Competitive scholarship (capped at 100 new awards) for a child of a wartime veteran with a service-connected disability rated 20% or more but less than 100% by the VA, or who was a former POW/MIA. Provides the standard scholarship benefit (public tuition + room/board allowance, or private allowance).
Class III (capped at 100 awards): child of a wartime veteran with a total disability that is NON-service-connected as rated by the VA. Class IV: child of a wartime veteran who was a POW or declared MIA. Provides the standard scholarship benefit. Note: due to limited funding, Spring 2026 awards were prorated to 25% of each student's Fall 2025 amount.
Under the NC Human Resources Act (G.S. 126-80 to 126-82) and G.S. 128-15, eligible veterans (active-duty service, discharged under other-than-dishonorable conditions) receive hiring preference for state positions, applied to initial and subsequent employment, promotions, transfers, and reductions-in-force. Where a numerically scored test/exam is used, 10 additional points are added to the eligible veteran's (or eligible National Guard member's) score.
Veterans with a combined VA rating of 100% (or Individual Unemployability paid at the 100% rate) receive a Disabled Veterans license plate with both the plate fee and registration fee waived (free annually). Per G.S. 20-79.7, the fee waiver does not apply to vehicles registered over 6,000 lbs (regular G.S. 20-88 fees apply there). Lower-rated veterans may obtain a 'Partially Disabled Veteran' plate at no extra cost beyond standard registration.
Lifetime combined hunting and fishing (Sportsman) license for an NC resident who is a 50% or more disabled veteran as determined by the VA. One-time cost of $100.00. Valid for the licensee's lifetime; entitles taking of wild animals/birds by lawful methods in open seasons and hook-and-line fishing in inland and joint waters, and access to Wildlife Resources Commission property. Requires VA certification.
The NC Department of Military & Veterans Affairs (DMVA) operates state veterans homes providing skilled nursing care, licensed by NC and approved for Medicare, Medicaid, and third-party insurance, with on-site physical/occupational/speech therapy. Current homes include Salisbury, Black Mountain, and a new home in Kernersville; the older Fayetteville facility is being closed/replaced. Admission is for eligible veterans; contact DMVA for current bed availability and eligibility specifics.
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North Carolina offers veteran benefits across property tax, income tax, education, employment, vehicle, recreation, veterans home. Highlights include Disabled Veteran Property Tax Homestead Exclusion, Bailey Retirement Benefits Exemption, Military Retirement Pay Deduction (20-year / medical-retirement). Eligibility varies — some benefits require a VA disability rating, 100% P&T status, or combat service.
Excludes the first $45,000 of appraised value of the permanent residence from property tax for honorably-discharged veterans with a 100% service-connected, permanent AND total VA disability, OR who receive 38 U.S.C. 2101 specially-adapted-housing benefits. No age or income limit. Also available to a
Under the Bailey v. State settlement, federal/military retirement benefits are fully exempt from NC income tax if the retiree had 5 or more years of creditable service as of August 12, 1989. This is an alternative, older path that fully exempts qualifying pay regardless of total years served.
Many state benefits are tied to your VA disability rating — the higher your rating, the more you may qualify for. Use the free VA Ready calculator to confirm your combined rating, then check which state benefits you've earned.