Minnesota Military and Veterans Benefits

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Education Benefits

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Minnesota Military Resource Locator

U.S. Department Of Veterans Affairs Facilities in Minnesota
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Summary of Minnesota Military and Veterans Benefits: Minnesota offers special benefits for its military Service members and Veterans including State Service members' Assistance Fund, Compensation for State Active Duty, Special License Plates, and Education Benefits for Minnesota Veterans, Service members and eligible Family members. Eligibility for some benefits may depend on residency, military component and Veteran disability status.

 
Minnesota Military and Veterans State Benefit Highlights and Eligibility

 
What are my Minnesota Military and Veterans State Tax Benefits?

Minnesota Tax Exemption for Active Duty Military Pay: If you are a military member and a Minnesota resident, you may subtract federally taxable active-duty military pay when determining your Minnesota tax.
Who is eligible for Minnesota Tax Exemption for Active Duty Military Pay? This subtraction may be claimed by:

  • Members serving in the U.S. or U.N. Armed Forces who receive active-duty military pay that are subject to federal tax under U.S. Code Title 10. You are employed for the full-time administration of the Minnesota Department of Military Affairs under Minnesota Statute 190.08, subdivision 3. If you are not paid under M.S. 190.08, subdivision 3, you do not qualify for this subtraction.

  • You serve in the Minnesota National Guard and Reserves, and you receive federally taxable active-duty pay for services or compensation for training and meetings under U.S. Code, titles 10 and 32. Examples include:

    • Active Duty Special Work (ADSW) or Active Duty Operational Support (ADOS)

    • Natural disaster emergency response, missing persons searches, and airport security duty

    • Re-enlistment bonuses

    • National Guard and Reserves duties, annual training, and drill weekends including training and meetings inside or outside of Minnesota

    • Compensation for serving while assigned to Active Guard Reserves (AGR) under U.S. Code, title 32 (beginning in tax year 2014)

Learn more about Minnesota Tax Deduction for Active Duty Military Pay

Minnesota Tax Debt Relief for Deceased Active Duty Military: Provides tax relief to the Family of any military member who dies during active service in the United States or United Nations Armed Forces. Under state law:

  • The Service member's income will not be taxed in the year of their death.

  • Any unpaid tax debts or penalties from prior years they were in active service will be abated (forgiven).

  • Their heirs may request a refund of income tax the member paid while in active service. Refund claims must be filed within seven years of when the member's return was filed, or when the tax was paid or collected.

Learn more about Minnesota Tax Debt Relief for Deceased Active Duty Military

Minnesota Income Tax Subtraction for Retired Military Pay: Beginning with tax year 2016, Minnesota will allow taxpayers to subtract certain military retirement pay (including pensions) when calculating Minnesota taxable income and Minnesota alternative minimum taxable income.

Who is eligible for the Minnesota Income Tax Subtraction for Retired Military Pay? To qualify for this subtraction, the retirement pay must be taxable on the federal return, and for:

  • Service in the active component of the military (U.S. Code Title 10, sections 1401 to 1414),

  • Retirement pay for service in the reserve component (U.S. Code Title 10, section 12733), or

To claim the subtraction, you must file a Minnesota Department of revenue, Schedule M1M, Income Additions and Subtractions . Taxpayers who claim this subtraction may not claim the nonrefundable credit for past military service.

Learn more about the Minnesota Income Tax Subtraction for Retired Military Pay

Minnesota State Taxes on 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).

Learn more about Minnesota State Taxes on Military Disability Retired Pay

Minnesota 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 Minnesota State Taxes on U.S. Department of Veterans Affairs Disability Dependency and Indemnity Compensation

Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Minnesota State Tax Subtraction: Beginning with tax year 2016, Minnesota will allow taxpayers to subtract Survivor benefit plan payments, including payments to a former Spouse as part of a court order when calculating Minnesota taxable income and Minnesota alternative minimum taxable income.

To qualify for this subtraction, the retirement pay must be taxable on the federal return for survivor benefit plan payments (U.S. Code Title 10, sections 1447 to 1455)

Learn more about Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Minnesota State Tax Subtraction

Minnesota Tax Credit for Military Service in Combat Zone: Service members who served in a combat zone or qualified hazardous duty area on or after January 1, 2014 may be eligible. This credit is based on the number of months served and is refundable, you may qualify to receive this credit even if you had no income or owed no tax. The credit is based on the number of full and/or partial months served. You will receive $120 for each month served in 2010 and going forward. Minnesota Department of Revenue Fact Sheet 5a – Military – Subtractions, Credits and Extensions

To claim the credit, complete Minnesota Form M99, Credit for Military Service in a Combat Zone , for the year when you served in a combat zone or qualifying duty area and file within 3.5 years from the original due date of your tax return.
Who is eligible for Minnesota Tax Credit for Military Service in Combat Zone? You may receive this credit if you meet ALL of the following requirements:

  • You served in a combat zone or qualified hazardous duty area anytime on or after Jan 1, 2014

  • The pay you received is excluded as combat pay from federal gross income under IRS Code Section 112.

  • Your home of record was Minnesota during your military service.

Learn more about Minnesota Tax Credit for Military Service in Combat Zone

Minnesota Tax Credit for Past Military Service: If you are a Veteran of the U.S. military, including the National Guard and Reserves, you may qualify for a tax credit of up to $750 for your past service. To determine the amount of your credit, complete the worksheet for Minnesota Schedule M1C, Other Nonrefundable Credits . If you are a part-year resident of Minnesota or a nonresident, you may still qualify for the credit. When completing the worksheet for Schedule M1C, use your percentage of Minnesota income from Minnesota Schedule M1NR, Nonresidents/Part-Year . The credit and qualifications can be found in Minnesota Statutes 290.0677 Subdivision 2.
Who is eligible for Minnesota Tax Credit for Past Military Service? You may qualify if your federal adjusted gross income is less than $37,500, you have separated from military service before the end of the year, and one of the following is true:

  • You served in the military for at least 20 years

  • You have a service-connected disability rating of 100% total and permanent (as rated by the U.S. Department of Veterans' Affairs), or

  • You were honorably discharged and you receive a pension or other retirement pay for service in the military

Learn more about Minnesota Tax Credit for Past Military Service

Minnesota Market Value Exclusion on Homestead Property of Disabled Veterans and Surviving Spouses: Minnesota Legislature enacted a market value exclusion for honorably discharged Veterans with service-connected disabilities. This is not a property tax exemption and it is not a tax forgiveness program. Rather, it lowers the property tax liability by subtracting the amount of the exclusion from the assessor’s estimated market value to arrive at a lower taxable market value. This program provides two different levels of market value exclusions:

  • For Veterans with 70% to 100% service-connected disability, the market value exclusion is up to $150,000 on homestead property; or

  • For Veterans with total (100%) and permanent service-connected disability or with permanent individual unemployability, the market value exclusion is up to $300,000 on homestead property.

Applications are available at the County Assessor's Office, with your Veteran's Service Office, or you may download the application

In addition to the completed application, you must also attach a letter from the Veteran’s Administration, confirming both honorable discharge and disability status.

  • Applications must be made by July 1 to qualify for the exclusion on the current year’s market value for taxes payable next year.

  • Veterans with a disability rating of 70 percent or higher will need to reapply annually.

  • Qualifying Spouses may apply within two years of the Veteran’s death.

Who is eligible for Minnesota Market Value Exclusion on Homestead Property of Disabled Veterans and Surviving Spouses? To qualify as a disabled Veteran, the Veteran must have been honorably discharged from the U.S. Armed Forces as indicated by U.S. Department of Defense form DD214 or other official military discharge papers and must be certified by the U.S. Dept. of Veterans Affairs (US/VA) as having a service-connected disability with a disability rating of 70 percent or higher.

Surviving Spouses of 100% permanently and totally disabled Veterans may be eligible to continue receiving the exclusion in the year of the Veteran’s death, plus eight more taxes payable years. If the Veteran died after December 31, 2011, but did not receive the exclusion before dying, the Spouse may still be eligible. Surviving Spouses receiving Dependency and Indemnity Compensation are also eligible. Spouses of members of the U.S. Armed Forces who died due to a service-connected cause while serving honorably in active service may qualify. In all instances, Surviving Spouses qualify for $300,000 of market value exclusion until they remarry, sell, transfer, or dispose of the property. There is no survivor benefit for Spouses of Veterans qualifying at the 70 percent standard.
Minnesota Disabled Veterans' Homestead Property Exclusion Fact Sheet

Learn more about Minnesota Market Value Exclusion on Homestead Property of Disabled Veterans and Surviving Spouses

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What are my Minnesota Military and Veterans Education Benefits?

Minnesota Higher Education Veterans Programs: MDVA's Higher Education Veterans Programs helps connect Veterans with educational benefits and resources to succeed in college. The programs support the success of Veterans, current military members and their Families at Minnesota's colleges and universities by providing on-site comprehensive information about benefits and resources as well as creating institutional readiness in support of the unique needs of these students. This nation-leading program provides staff at colleges and universities throughout Minnesota to help identify and remove barriers to Veterans' enrollment and access to benefits, as well as to create and manage campus Veterans resource centers.

Specifically, the Minnesota Higher Education Veterans Program Coordinators help schools establish "Veteran friendly" policies and procedures. They can also help with things like:

  • Payment extensions while awaiting properly applied for educational benefits

  • Military transfer credit

  • Veteran resident status

  • Options for withdrawal from classes due to deployment

On-campus Veterans Resource Centers are unique to Minnesota and provide an environment where Veterans, military members and their Families feel welcome. They also provide space for interaction with other Veterans and Family members of Veterans. This space is a way for Veterans to connect with each other and representatives from the Higher Education Program. For more information call 1-800-456-8519 or +1-651-556-0596 (international) or 1-800-627-3529 TT.
Minnesota Higher Education Veterans Program Coordinators Directory
Minnesota Higher Education Veterans Program Brochure

Learn more about Minnesota Higher Education Veterans Programs

Minnesota Veteran Education Assistance: Veteran Education Assistance is provided to Veterans in the form of a one-time $750 grant for tuition to Veterans who have exhausted, through use, all of their GI Bill benefits to assist with completing a bachelor's degree. This grant is paid directly to the institution or may be reimbursed to Veteran upon verification that tuition has been paid. You may apply for this benefit by accessing the application below and submitting directly to MDVA or applying with assistance through your County Veterans Service Officer.
Who is eligible for Minnesota Veteran Education Assistance? To be eligible, the applicant must meet the following criteria:

  • The Veteran shall have been a resident of the State of Minnesota at the time of entry into the Armed Forces, and for six months immediately preceding entry

  • The Veteran must be a citizen of the United States and a current resident of Minnesota

  • The Veteran must have completely exhausted his/her federal educational benefits prior to the delimiting date or within the eligibility period during which benefits were available. Veterans who have allowed their educational benefits to expire without completely using them do not qualify for this program

Benefits May be used at the following Minnesota Higher Education Institutions:

  • State Universities

  • Community colleges

  • Vocational technical colleges

  • Any campus of the University of Minnesota

  • Any college of higher learning which has been accredited by the North Central Association of Colleges and Secondary Schools

  • Law college approved by the Supreme Court

  • Theological seminary

  • Nursing school approved by the Board of Nursing

  • Vocational technical trade or business school approved by the State Department of Education

Minnesota Veteran Education Assistance Application Form

Learn more about Minnesota Veteran Education Assistance