Maryland Military and Veterans Benefits
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Summary of Maryland Military and Veterans Benefits: The State of Maryland offers special benefits for its military Service members and Veterans including retired military pay tax exemptions, education and tuition assistance, employment services, special military vehicle tags, as well as hunting and fishing license privileges. Eligibility for some benefits may depend on residency, military component and Veteran disability status.
Maryland Military and Veterans State Benefit Highlights and Eligibility
What are my Maryland State Tax Benefits?
Maryland Income Tax on Retired Military Pay: Military retirees or the Spouse of military retiree can subtract up to $5,000 with an increase to the first $15,000 for individuals who are at least 55 years old on the last day of the taxable year, of your military retirement income from your federal adjusted gross income before determining your Maryland tax.
Who is eligible for a reduction in Maryland Income Tax on Retired Military Pay? The retirement income must have been received as a result of any of the following military service:
Induction into the U.S. armed forces for training and service under the Selective Training and Service Act of 1940 or a subsequent Act of similar nature.
Membership in a reserve component of the U.S. armed forces.
Membership in an active component of the U.S. armed forces.
Membership in the Maryland National Guard.
The benefit also applies to persons separated from active duty employment with the commissioned corps of the Public Health Service, the National Oceanic and Atmospheric Administration, or the Coast and Geodetic Survey.
Maryland State Taxes on U.S. Department of Veterans Affairs Military Disability Retired Pay: 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 on September 24, 1975;
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).
Maryland 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.
Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Maryland State Tax Benefits: Surviving Spouses receiving military retirement income are able to subtract up to $5,000 of the income from federal adjusted gross income before determining Maryland tax. Beginning with tax year 2018, if you are age 65 or older, you will be able to subtract up to $15,000 of the military retirement income.
Maryland Pension Exclusion: If you are 65 or older or totally disabled (or your Spouse is totally disabled), you may qualify for Maryland's maximum pension exclusion of $30,600 under the conditions described in Instruction 13 of the 2018 Maryland Resident Tax Booklet . If you're eligible, you may be able to subtract some of your taxable pension and retirement annuity income from your federal adjusted gross income.
This subtraction applies only if:
You were 65 or older or totally disabled, or your Spouse was totally disabled, on the last day of the tax year; and
You included on your federal return income received as a pension, annuity or endowment from an "employee retirement system." A traditional IRA, a Roth IRA, a simplified employee plan (SEP), a Keogh Plan or an ineligible deferred compensation plan does not qualify.
Complete the Maryland Pension Exclusion Computation Worksheet shown in Instruction 13 in the Maryland resident tax booklet. Be sure to report all benefits received under the Social Security Act and/or Railroad Retirement Act on line 3 of the pension exclusion worksheet - not just those benefits you included in your federal adjusted gross income.
To receive the benefit of the pension exclusion, be sure to transfer the amount from line 5 of the worksheet to line 10 of Form 502, and complete the remainder of your return, following the line-by-line instructions.
Maryland Overseas Pay Subtraction: Legal residents of Maryland and a member of the U.S. Armed Forces who earned military pay while in active service outside U.S. boundaries or possessions, you may subtract up to $15,000 of that military pay from your taxable income.
If your total military pay exceeds $30,000, you do not qualify for this subtraction. You can use the Military Overseas Income Worksheet included in Instruction 13 of the 2018 Maryland Resident Tax Booklet to compute the subtraction. For more information, see code p of Instruction 13.
Maryland Disabled Veterans Property Tax Exemption: A property tax exemption is available to Veterans with a service-connected disability rated 100% "permanent and total" by the Veterans Administration may receive a complete exemption from real property taxes on the dwelling house and surrounding yard. These Veterans may apply at any time and do not have to meet the September 1 filing deadline. Un-remarried Surviving Spouses also may apply for this exemption. Surviving Spouses of military personnel killed in the line of duty may apply for an exemption.
Maryland Property Tax Exemption for Disabled Veterans Application
Maryland Military Spouse Residency Relief Act: The wages earned by a Spouse of a nonresident U.S. Service member may be exempt from Maryland income tax under the Military Spouses Residency Relief Act, when the Spouse of the Service member is not a legal resident of Maryland. The income tax withholding exemption may be claimed by filing a revised Exemption from Maryland Withholding Tax for a Qualified Civilian Spouse of a Armed Forces Service Member, Form MW507 with their employer. You must also complete and attach Maryland Employee's withholding Exemption Certificate Form MW507M . For more information, see Employer Withholding Tax Alert: Important Information for Spouses of U.S. Military Service members Fact Sheet and the Maryland Income Tax Administrative Release Military Personnel and Civilian Spouses .
As the military Spouse, you remain a nonresident for purposes of Maryland taxation, and are not required to file a Maryland return, unless you received non-military income from Maryland sources. You may choose to file a joint resident return using Maryland Resident Income Tax Return Form 502 , or your civilian Spouse may file a separate resident return.
Maryland Vessel Excise Tax Credit for Military Personnel: Active duty military personnel are exempt from the 5% vessel excise tax for one year. The exemption applies only to vessels currently registered elsewhere and brought into Maryland because of the duty transfer. New purchases are not exempt.
For more information on the vessel excise tax credit visit the Maryland Department of Natural Resources website.
What are my Maryland Military and Veterans Education Benefits?
Maryland National Guard State Tuition Waiver (STW): ALL state-supported colleges / universities (Except UMUC) offer tuition waiver for members of the Guard when taking credited, undergraduate or graduate courses. Each institution has their own rules that govern the number of seats available and the number of credit hours eligible for tuition waiver. Classes held at Maryland National Guard locations are available to all Guard members with a 25% or 50% tuition waiver, regardless of space available. Professional courses are not eligible for STW. *Can now be used for Trade Schools in partnership with the Maryland Army National Guard.
Who is eligible for the Maryland National Guard State Tuition Waiver (STW)? Must be a Maryland National Guard Service member in good standing and must have a two-year obligation remaining from the course start date.
* Note: Can be used with State Tuition Assistance Reimbursement, Montgomery G.I. Bill, Federal Tuition Assistance.
Maryland National Guard State Tuition Waiver Letter
Maryland National Guard State Tuition Assistance Reimbursement (STAR): STAR reimburses Maryland Guard Members up to 50% tuition and related fees at all Partners in Education colleges and universities. The Guard member receives tuition reimbursement directly from the State of Maryland. STAR reimburses students 50% of the cost of tuition and related fees at all Maryland State supported Colleges/Universities, some private institutions and Trade Schools. It is available for undergraduate courses and may be used in conjunction with State Tuition Waiver, Montgomery GI Bill, and Federal Tuition Assistance (FTA). Tuition is reimbursed for grades C and above.
Who is eligible for Maryland National Guard State Tuition Assistance Reimbursement (STAR)? To be eligible you must be a member of the Maryland National Guard in good standing, must be in pay grade E-1 through O-4 and you must have a two-year obligation remaining from the course start date.
Edward T. and Mary A. Conroy Memorial Scholarship & Jean B. Cryor Memorial Scholarship Program: The Edward T. and Mary A. Conroy Memorial Scholarship & Jean B. Cryor Memorial Scholarship Program offers aid for tuition and other educational expenses to Veterans and their Family members who are attending an institution of higher learning within the borders of the State of Maryland. This award is not based on financial need.
The amount of your award may not exceed the equivalent annual tuition and mandatory fees, of a resident undergraduate at a four-year public institution of higher education within the University System of Maryland, other than the University of Maryland University College and the University of Maryland, Baltimore, with the highest annual expenses for a full-time resident undergraduate. New and renewal applicants to the program must contact their college's financial aid office for application instructions.
Who is eligible for the Edward T. and Mary A. Conroy Memorial Scholarship & Jean B. Cryor Memorial Scholarship Program? You must be:
A Maryland resident, and if dependent, your parents must also be Maryland residents (except for Spouses and Children of public safety officers killed in the line of duty); or
The Son, Daughter, step-Child or Surviving Spouse (who has not remarried) of a member of the United States Armed Forces who died or was 100 percent disabled as a direct result of military service; or
A Veteran who suffers, as a direct result of military service, a disability of 25 percent or greater and has exhausted or is no longer eligible for federal Veterans' educational benefits; or
The Son, Daughter, step-Child or Surviving Spouse of a victim of the September 11, 2001 terrorist attack who died as a result of the attacks on the World Trade Center in New York City, the attack on the Pentagon in Virginia, or the crash of United Airlines Flight 93 in Pennsylvania; or
A POW/MIA of the Vietnam Conflict or his/her son, daughter or step-Child or Surviving Spouse (who has not remarried).
Your award will be renewed if you continue to meet eligibility requirements as outlined above and maintain the satisfactory academic progress standards of your institution each year.
Edward T. and Mary A. Conroy Memorial Scholarship & Jean B. Cryor Memorial Scholarship Program Fact Sheet
Maryland Higher Education Commission Veterans of the Afghanistan & Iraq Conflicts (VAIC) Scholarship Program: This program is designed to provide financial assistance to United States armed forces personnel who served in the Afghanistan or Iraq Conflicts, and their sons, daughters, or Spouses who are current high school seniors, and full-time and part-time, degree-seeking undergraduate students enrolled in an eligible accredited Maryland postsecondary institution.
Who is eligible for the Maryland Higher Education Commission Veterans of the Afghanistan & Iraq Conflicts (VAIC) Scholarship Program? Uniformed Services Members of the United States who served in Afghanistan, or contiguous air space as defined in federal regulations, on or after October 24, 2001, and before a terminal date to be prescribed by the United States Secretary of Defense; or in Iraq, or contiguous waters or air space as defined in federal regulations, on or after March 19, 2003, and before a terminal date to be prescribed by the United States Secretary of Defense, may apply for a scholarship if they are:
A Veteran who served at least 60 days in the Afghanistan or Iraq Conflicts, as defined above;
An active duty member of the Armed Forces who served at least 60 days in the Afghanistan or Iraq Conflicts, as defined above;
A member of a Reserve Component of the Armed Forces of the United States or the Maryland
National Guard who was activated as a result of the Afghanistan or Iraq Conflicts and served at least 60 days, as defined above; or
A Son, Daughter, or Spouse of:
A Veteran or active duty member of the Armed Forces who is serving or has served in the Afghanistan or Iraq Conflicts at least 60 days, as defined above; or
A member of a Reserve Component of the Armed Forces or Maryland National Guard who was activated as a result of the Afghanistan or Iraq Conflicts and served at least 60 days, as defined above.
Applicants must be residents of Maryland, must be accepted for admission or enrolled in a regular undergraduate program at an eligible Maryland institution, or be accepted for admission or enrolled in a 2-year terminal certificate program in which the course work is acceptable for transfer credit for an accredited baccalaureate program at an eligible Maryland institution. Students must be enrolled as either a full-time (12+ credits per semester) or part-time (6-11 credits per semester) undergraduate student.
Note: Residents of Maryland include active members of the United States Armed Forces, their Spouses and their dependent Children who are stationed in the State of Maryland or whose home of residency is Maryland.
How to Apply: The application period begins in January; applications must be received by March 1 of each year. The application process begins online at the Maryland Higher Education Application webpage, with all required supporting documentation, including:
A Free Application for Federal Student Aid (FAFSA) filed by March 1 each year
Birth Certificate showing the names of both Parents (for Child of a Veteran)
Marriage Certificate (for Spouse of a Veteran)
Documentation of GI Bill benefits (Ch 33 or Post-9/11)
Documentation of military orders:
United States Armed Forces - Active Duty: copy of current official military orders: documentation of service in Afghanistan/Iraq
United States Armed Forces - Veteran: copy of Certificate of Release or Discharge from Active Duty (DD214)
United States Armed Forces - Reserve Component: copy of Certificate of Release or Discharge from Active Duty (DD214)
Maryland National Guard: copy of Certificate of Release or Discharge from Active Duty (DD214)
Note: DD214 form must include dates served and where served (Afghanistan/Iraq or contiguous waters or air space). If information is not on DD214, other official documentation must be provided with dates and places as listed above.
Award Amounts: The award amount may not exceed 50% of the annual tuition, mandatory fees, and room & board of a resident undergraduate at the four-year public institution of higher education within the University System of Maryland, other than the University of Maryland University College and the University of Maryland, Baltimore, with the highest annual expenses for a full-time resident undergraduate.
The 2018-2019 maximum award amounts are shown below:
On Campus: up to $7,152
With Parents: up to $4,498
Off Campus: up to $5,068
Award amounts are tentative and may be adjusted based on verification of Veterans Educational Benefits received under Chapter 33 or Post-9/11 GI Bill.
*Note: Awards are subject to availability of funds.
The total amount of all State awards may not exceed cost of attendance as determined by the school's financial aid office or $28,000, whichever is less.
Maryland High School Diplomas for WWII and Korean War Veterans: County Boards of Education award high school diplomas to Korea and World War II Veterans who left high school early to enter the Armed Forces. Diplomas are also issued to any Veteran upon successful completion of the General Education Development (GED) test. For more information contact your local board of education.
Maryland Local Board of Education Directory
Maryland 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:
Facilitating the timely enrollment of Children of military Families and ensuring that they are not placed at a disadvantage due to difficulty in the transfer of educational records from the previous school