Illinois Military and Veterans Benefits

State Taxes
Education Benefits
Employment Benefits
Unemployment Compensation
Department of Vehicle Services
Health and Insurance Benefits
Parks & Recreation Benefits
Miscellaneous Benefits
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U.S. Department of Veterans Affairs (VA) Facilities
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Summary of Illinois Military and Veterans Benefits: The State of Illinois offers special benefits for its military Service members and Veterans including Property Tax Exemptions, exemptions for Specially Adapted Housing and Mobile Homes, State Employment Preferences and Assistance, Education and Tuition Assistance, Special Vehicle Tags, Veterans Homes, Burial Benefits as well as Hunting, Fishing Licenses and State Camping privileges. Eligibility for some benefits may depend on residency, military component and Veteran disability status.

Illinois State Military and Veterans Benefit Highlights and Eligibility

 


What are my Illinois Military and Veterans State Tax Benefits?

Illinois State Income Tax on Military Income: Military pay that is in the Adjusted Gross Income may be subtracted, including:

  • Pay for duty in the Armed Forces, including basic training;

  • Pay for duty as a cadet at a service academy or in ROTC;

  • Pay for duty serving in the National Guard or U.S. Army Reserve forces (including a National Guard unit of another state).

Pay you may not subtract:

  • Military income (such as combat pay) that was excluded from the AGI on Form IL-1040, Line 1;

  • Pay received under the Voluntary Separation Incentive (VSI);

  • Pay received from the military as a civilian;

  • Payments made under the Ready Reserve Mobilization Income Insurance program or

  • Pay for duty as an officer in the Public Health Service.

Learn more about Illinois State Income Tax on Military Income

Illinois Military Spouse Residency Relief Act: Under the Military Spouse Residency Relief Act, effective for tax years 2009 and after, if you are a nonresident Spouse of a Service member, you and your Service member have the same domicile, and you are in Illinois only to accompany your Spouse on their military assignment, your employee wages earned in Illinois are not taxable by Illinois. If you had Illinois Income Tax withheld from your wages, you are entitled to a refund if your wages are exempt from Illinois tax under this law. To file your refund:

  • For tax years 2010 and after, you must file Form IL-1040 and Schedule NR and mark the Military Spouse box on Schedule NR.

Note: If you are an Illinois resident, your wages are taxable by Illinois regardless of where you work.

Learn more about the Illinois Military Spouse Residency Relief Act

Illinois State Income Tax on Retirement and Disability Income: Illinois does not tax distributions received from:

  • A qualified employee benefit plan including 401(k) plans as reported on your U.S. 1040, Line 4b.

  • A qualified employee benefit plan is defined in IRC Sections 402 through 408. If you do not know whether your employee benefit plan is qualified, check with your employer.

  • Railroad retirement income as reported on your U.S. 1040, Line 4b and 5b.

  • An Individual Retirement Account (IRA) (including amounts rolled over to a Roth IRA) or a self-employed retirement (SEP) plan as reported on your U.S. 1040, Line 4b.

  • Social Security benefits as reported on your U.S. 1040, Line 5b. Do not include Social Security withheld from wages shown on your Form W-2, Wage and Tax Statement.

  • A government retirement or government disability plan, including military plans, reported on your U.S. 1040, Line 1.

  • A state or local governmental deferred compensation plan paid under Internal Revenue Code (IRC) Section 457 and reported on your U.S. 1040, Line 1 or 4b.

  • Capital gains on employer securities received in a lump-sum distribution, to the extent the gains are due to net unrealized appreciation on the securities at the time of distribution and reported on your U.S. 1040, Schedule 1, Line 13.

  • Retirement payments to retired partners as reported on your U.S. 1040, Line 17.

  • Group term life insurance premiums paid by a qualified retirement plan or government retirement plan and included as wages on your U.S. 1040, Line 1.

  • Interest income realized on the redemption of U.S. retirement bonds as reported on your U.S. 1040, Line 2b.

Illinois Retired Military Pay Taxes: Illinois does not tax government retirement plans.

Illinois State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay: Illinois does not tax government disability plans. Military Disability Retirement Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the Armed Forces should not be included in taxable income if any of the following conditions apply:

  • You were entitled to receive a disability payment before September 25, 1975;

  • You were a member of the military (active or reserves) or were under a binding written commitment to become a member o

  • You receive disability payments for a combat-related injury. This is a personal injury or sickness that:

    • Resulted directly from armed conflict,

    • Took place while you were engaged in extra-hazardous service,

    • Took place under conditions simulating, including training exercises such as maneuvers, or

    • Was caused by an instrumentality of war.

  • You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it (the exclusion under this condition equals the amount you would be entitled to from the VA).

  Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Illinois State Tax Benefits: Illinois does not tax government retirement plans.

Learn more about Illinois State Income Tax on Retirement and Disability Income

Illinois State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation: Dependency and Indemnity Compensation (DIC) is a tax-free monetary benefit paid to eligible survivors of military Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.

Learn more about Illinois State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation

Illinois Disabled Veteran Tax Exemption for Mobile Homes: This exemption applies to the tax imposed by the Mobile Home Local Services Tax Act when that property is owned and used exclusively by a disabled Veteran, Spouse or unmarried Surviving Spouse as a home.
Who is eligible for Illinois Disabled Veteran Tax Exemption for Mobile Homes? This exemption applies to the tax levied by each county to the owner of a mobile home that meet all of the following criteria:

  • Mobile home must be owned and used exclusively by a disabled Veteran;

  • Spouse or unmarried Surviving Spouse as their primary residence;

  • The disabled Veteran must have been awarded the Specially Adapted Housing Grant by the U.S. Department of Veterans Affairs for a primary residence that they owned and resided in prior to purchase of the mobile home; And

  • The disabled Veteran, Spouse or unmarried Surviving Spouse must be a permanent resident of the State of Illinois on January 1 of the tax year for which the exemption is being claimed.

Contact your county tax assessor's office or your local Veteran Service Officer for further information.
Illinois County Assessor Directory
Illinois Veteran Service Officer Directory

Learn more about the Illinois Disabled Veteran Tax Exemption for Mobile Homes

Illinois Returning Veterans' Homestead Exemption (RVHE): ( 35 ILCS 200/15-167 ) The Returning Veterans' Homestead Exemption provides qualifying Veterans a one-time $5,000 reduction to their homes' equalized assessed value (EAV). Qualifying Veterans who return from active duty in an armed conflict involving the U.S. Armed Forces can file an application upon their return home to receive this exemption. To apply for this exemption, please contact or visit your local County Assessor's Office.
Illinois County Assessor Directory

Learn more about the Illinois Returning Veterans' Homestead Exemption (RVHE)

Illinois Disabled Veterans' Standard Homestead Exemption (DVSHE): ( 35 ILCS 200/15-169 ) The Disabled Veterans' Standard Homestead Exemption provides a reduction in a property's equalized assessed value (EAV) to a qualifying property owned by a Veteran with a service-connected disability. Beginning in tax year 2015, a $2,500 homestead exemption is available to a Veteran with a service-connected disability of at least 30% but less than 50%; a $5,000 homestead exemption is available to a Veteran with a service connected disability of at least 50% but less than 70%; Veterans with a service-connected disability of at least 70% are exempt from paying property taxes on their primary residence. This exemption is available to the unmarried Surviving Spouse of a service-connected Veteran provided that the Veteran was in receipt of the exemption prior to their death. Additionally, beginning in tax year 2015 and thereafter, the unmarried Surviving Spouse of a Service member killed in the line of duty is exempt from paying property taxes on the primary residence. Once approved, qualifying Veterans and Surviving Spouses must file an annual application by their counties' deadlines to continue to receive this exemption. To apply for this exemption, please contact or visit your local County Assessor's Office.
Illinois County Assessor Directory

Learn more about the Illinois Disabled Veterans' Standard Homestead Exemption (DVSHE)

  Illinois Disabled Veterans' Exemption for Specially Adapted Housing: ( 35 ILCS 200/15-165 ) This exemption is allowed on the assessed value of real property for which federal funds have been used for the purchase or construction of specially adapted housing; the exemption is valid for as long as the Veteran, the Spouse, or the unmarried Surviving Spouse resides on the property. Federal and state financial assistance is provided for service-connected disabled Veterans for the purpose of acquiring or remodeling suitable dwelling units with special fixtures or moveable facilities made necessary by the Veteran's permanent and total service-connected disabilities as determined by the U.S. Department of Veterans' Affairs. For further information, please contact your local Veteran Service Officer.
Illinois Veteran Service Officer Directory

Learn more about the Illinois Disabled Veterans' Exemption for Specially Adapted Housing

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What are my Illinois Military and Veterans Education Benefits?

Illinois National Guard Grant Program: If you are a member of the Illinois National Guard, you may be eligible to receive the Illinois National Guard (ING) Grant. This grant can pay for eligible tuition and certain fees (i.e., registration, graduation, general activity, matriculation and term fees) for undergraduate or graduate study. Benefits are limited to use only at Illinois 2- or 4-year public colleges as follows:

  •  If you have completed less than ten years of active duty ING service, your grant can be used for a maximum of the equivalent of four academic years of full-time enrollment.

  • Once you have completed ten years or more of active duty ING service, your grant can be used for a maximum of the equivalent of six academic years of full-time enrollment (note that the six-year maximum eligibility is cumulative, and includes benefits received when you had less than ten years of service).

Contact the financial aid office at your college to determine what portion of your total tuition and fees will be covered by this grant.
Who is eligible for the Illinois National Guard Grant Program? To be eligible for this grant:

  • Be an Illinois National Guard member, defined as meeting one of these two criterion:

    • be active in the Illinois National Guard or

    • have been active in the Illinois National Guard for at least five consecutive years and had their studies interrupted by being called to federal active duty service for at least six months and be within 12 months after your discharge date from the Illinois National Guard. (These applicants may be eligible to receive an additional year of ING Grant Program eligibility. Eligibility under this provision is determined by the Education/Incentives Branch of the Military Personnel Office in Springfield, Illinois. Questions regarding your individual eligibility status under this provision should be directed to your chain of command, or to the Education/Incentives Branch of the Military Personnel Office at 217.761.3782.)

  • Have completed one full year of service in the Illinois National Guard

  • Be an enlisted member or an officer

  • Be enrolled at an Illinois public 2- or 4-year college

  • Not be in default on any student loan, nor owe a refund on any state or federal grant. If you are in default, you may re-establish your eligibility.

  • Maintain an acceptable grade point average (GPA) according to the policy determined by your college

  • Submit your complete application on or before the deadline date, based on the first term for which you wish to receive funds each academic year. For 2019-20:

    • October 1, 2019 - Full Year Consideration

    • March 1, 2020 - Only 2nd Semester (2nd/3rd Quarter) and Summer Consideration

    • June 15, 2020 - Only Summer Term Consideration

Illinois National Guard (ING) Grant Application Online Portal
2019-20 Illinois National Guard (ING) Grant Program Approved Illinois Schools

Learn more about the Illinois National Guard Grant Program

Illinois Educational Opportunities for Children (10-18 Yrs.): Financial aid is provided annually to each Child between the ages of 10 and 18 years of a Veteran who died or became totally disabled as a result of service in the Armed Forces during World War I, or II, the Korean and Vietnam Conflicts or (beginning February 1, 1955), the Gulf War, Operation Enduring Freedom or Operation Iraqi Freedom, until such individuals are no longer eligible for induction under the Universal Military Training and Service Act. The financial aid applies to a state educational institution of elementary grade, high school or vocational training school.
Illinois Department of Veterans' Affairs, Application for Veterans' Children Educational Opportunities Part 1
Illinois Department of Veterans' Affairs, Application for Veterans' Children Educational Opportunities Part 2

Learn more about the Illinois Educational Opportunities for Children (10-18 Yrs.)

Illinois Missing in Action / Prisoner of War Scholarship: The State of Illinois provides an education scholarship for the dependents of Veterans who are either Missing in Action, a Prisoner of War, died while on active duty, 100% disabled due to service connected disabilities or died as a result of a service connected disabilities. 105 ILCS 5/30-14.2 (MIA/POW Scholarship) establishes the benefit and 95 Ill. Admin Code 116 (MIA/POW Scholarship) provides the rules governing the administration and eligibility of dependents. An eligible dependent is entitled to full payment of tuition and certain fees to any Illinois state supported college or university. The scholarship is based on a points system. (Semester hours) Maximum points allowed is 120.

1 Credit Hour = 1 Point

2 Credit Hours = 2 Points

3 Credit Hours = 3 Points

4 Credit Hours = 4 Points

5 Credit Hours = 5 Points

6-8 Credit Hours = 6 Points

9-11 Credit Hours = 9 Points

12 Or More Hours = 12 Points

The holder of the Scholarship shall be subject to all examinations and academic standards, including the maintenance of minimum grade levels that are applicable to others enrolled in the Illinois institution of higher learning where the Scholarship is used. The following fees, if listed in the school handbook, will be covered:

  • Activity Fee

  • Application Fee

  • Graduation Fee

  • Term Fee

  • Instructional Fee

  • Proficiency Test Fee

  • CLEP Test Fee

  • Placement Tests Fee

  • Board of Governors Test Fee.

Who is eligible for the Illinois Missing in Action / Prisoner of War Scholarship? You must be the Spouse, Surviving Spouse, natural Child, step-Child or adopted Child of the Veteran to qualify. The Veteran must have been an Illinois resident at the time of entry into Active duty service. This information can be found on the Veteran’s DD214 (Report of Separation) or Enlistment Contract. Finally, the Veteran must meet one of the following criteria to qualify:

  • Veteran must have been an MIA (Missing in Action)

  • Veteran must have been a POW (Prisoner of War)

  • Veteran must be rated by the U.S. Department of Veterans’ Affairs (USDVA) as being 100% permanent and totally disabled by service-connected causes

  • Veteran must be rated by the U.S. Department of Veterans’ Affairs (USDVA) as being 100% permanent and totally disabled by service-connected causes due to un-employability

  • Veteran’s death must be rated service connected by the U.S. Department of Veterans’ Affairs (USDVA).

If the Surviving Spouse remarries or if there is a divorce from the Veteran or service person, the scholarship benefit for the remarried Surviving Spouse and step-Children will terminate on the date of the remarriage or divorce. If the Surviving Spouse remarries or if there is a divorce from the Veteran or serviceperson while the Spouse and/or step-Children are pursuing a course of study, scholarship benefits will be terminated at the end of the term for which they are presently enrolled. The natural Child, adopted Child, or step-Child must begin utilizing the benefit prior to the age of 26.
Illinois Department of Veterans' Affairs, Illinois MIA/POW Scholarship Application

Learn more about the Illinois Missing in Action / Prisoner of War Scholarship

Illinois Veterans' Grant: The Illinois Veteran Grant (IVG) Program pays tuition and mandatory fees at all Illinois state-supported colleges, universities and community colleges for Illinois Veterans.
Who is eligible for the Illinois Veterans' Grant? An individual must:

  • Be an honorably discharged Veteran; and

  • Reside in Illinois six months before entering the service; and

  • Have at least one full year of active duty in the U.S. Armed Forces which includes Veterans who were assigned to active duty in a foreign country in a time of hostilities in that country, regardless of length of service; and

  • Return to Illinois within six months of discharge from the service.

Applications and additional information are available from Veteran Service Officer Offices of the Illinois Department of Veterans' Affairs, college financial aid offices or the Illinois Student Assistance Commission, 1755 Lake Cook Road, Deerfield, 60015, telephone 847-948-8550 or 800-899-ISAC.
Illinois Student Education Commission Website

Illinois Veteran Service Officer Offices Directory

Learn more about the Illinois Veterans' Grant

Illinois Children of Veterans Scholarship: Each county in the state shall be entitled, annually, to one honorary scholarship in the University of Illinois, for the benefit of Children of Veterans of WWI, WWII, Korean and Vietnam Conflict and any time on or after August 2, 1990 and until those persons in service are no longer eligible for the Southwest Asia Service Medal. Preference is given to the Children of deceased and disabled Veterans. Such Children shall be entitled to receive, without charge for tuition, instruction in any or all departments of the University for a term of at least four (4) consecutive years. Details may be obtained from the University of Illinois' Financial Aid Office .

Learn more about the Illinois Children of Veterans Scholarship

Academic Credit at Illinois Higher Education Institutions for Military Training: The Office of the Governor and the Illinois Department of Veterans' Affairs, in cooperation with the Illinois Community College Board, several community colleges, the Illinois Board of Higher Education and MyCreditsTransfer, completed a collaborative project to grant student Veterans appropriate academic credit for the education and training they gained in military service.

Because of the Making Military Training Count initiative, Veterans and Service members can enter college with earned course credits, useful credits that apply toward meeting degree requirements, simply by documenting their already-completed military training. See how your military coursework, exams, and/or learning experiences count at specific schools using Transferology. Visit Illinois Transfer Portal, iTransfer website to learn more. You can also find out what your options are for taking classes at another school to transfer back to your current school by using the "Find a Replacement Course" feature.

Many Illinois colleges have developed transfer credit for military learning experience, including City Colleges of Chicago, College of DuPage, College of Lake County, DePaul University, Kaskaskia College and Southwestern Illinois College.

Learn more about Academic Credit at Illinois Higher Education Institutions for Military Training

Illinois Bright Start Fallen Heroes Scholarship : The state will deposit $1000.00 in a Bright Start account for each Child of a fallen Service member. Bright Start is required to pay the school directly.
Who is eligible for the Illinois Bright Start Fallen Heroes Scholarship? The beneficiary must be a U.S. citizen under the age of 30 years old. Fallen Heroes home of record on file with the U.S. Department of Defense must be in Illinois and a photocopy of a birth certificate, adoption certificate or marriage license must be provided. The funds in a Bright Start account funded with a scholarship award can only be used for qualified higher education expenses of the Beneficiary for attendance or enrollment at an eligible institution.

Scholarship Terms:

  • The state will deposit $1,000 in a Bright Start account for each Child of a fallen Illinois Service member who served in Operation Iraqi Freedom or Operation Enduring Freedom upon the request of a surviving Family member. All Illinois active and reserve servicemen and women are eligible.

  • The money will be invested in an age-based portfolio, which adjusts automatically as the beneficiary ages. The closer the Child is to college-age, the more conservative the investments become.

  • Payments will be made by the Treasurer’s Office directly to an accredited college or university anywhere in the U.S. or at select institutions abroad. The scholarship will be applied only to tuition, fees and room and board and must be spent before the Child reaches age 30.

  • Individuals other than the state can make tax-free contributions to the scholarship account, but the state retains control of account disbursement.

  • The scholarship can be used in conjunction with other federal benefits that Children of fallen Service members are eligible to receive.

To apply:

Office of the Illinois State Treasurer
Fallen Heroes Scholarship
100 W. Randolph Street, Suite 15-600
Chicago, Illinois 60601
Bright Start Fallen Heroes, Scholarship Program Application

Learn more about the Illinois Bright Start Fallen Heroes Scholarship

Illinois Interstate Compact on Educational Opportunity for Military Children: It is the purpose of this compact to remove barriers to educational success imposed on Children of military Families because of frequent moves and deployment of their parents by: