Veteran Benefits for Alabama - Veterans Guardian

The state of Alabama offers special benefits for Service members, Veterans, and their families. Benefits include state tax benefits, property tax exemptions, the Alabama National Guard Tuition Scholarship Program, education and tuition assistance, vehicle tags, state employment hiring preference, as well as hunting and fishing license privileges. Eligibility for some benefits may depend on residency, military component, and Veteran disability status. The following are benefits for the state of Alabama.

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Alabama Veteran Financial Benefits

Retired Military Pay Income Tax Exemption: Military retired pay is exempt from Alabama income tax. Thrift Savings Plan (TSP) does not withhold taxes for state or local income tax, but it is reported annually on IRS Form 1099-R. All TSP distributions are subject to state taxes, and early distributions may incur higher taxes.
Income Tax Exemption for Military Combat Pay: Service members receiving pay for service in a combat zone, designated by the President of the U.S., are eligible for the exemption.
Who is eligible for the Alabama Income Tax Exemption for Military Combat Pay? Service members receiving pay for service in a combat zone: that has been designated by the President of the U.S. are eligible for the exemption.
Alabama Income Taxes on Military Pay: Resident Service members must pay state taxes on military pay with the exception of allowances paid for quarters, subsistence, uniforms, and travel.
Alabama State Taxes on U.S. Department of Veterans Affairs Military Disability Retirement Pay: Military Disability Retirement Pay received as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in the U.S. Armed Forces should not be included in taxable income. Some of the payments that are considered disability benefits include:
- Disability compensation and pension payments for disabilities paid to veterans or their families
- Grants for homes designed for wheelchair living
- Grants for motor vehicles of veterans who lost their sign or use of limbs, or
- Benefits under a dependent-care assistance program
Alabama State Taxes on U.S. Department of Veterans Affairs Disability
Dependency and Indemnity Compensation (DIC): DIC is a tax-free monetary benefit paid to eligible survivors of Service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-connected injury or disease.
Military Survivor Benefit Plan (SBP)/ Reserve Component Survivor Benefit Plan (RCSBP)/ Retired Serviceman’s Family Protection Plan (RSFPP) Alabama State Tax Benefits: SBP, RCSBP and RSFPP are exempt from Alabama income tax.
Alabama Homestead Tax Exemption for Residents over age 65, Blind or Totally Disabled: Alabama offers a homestead exemption for all state, county, and city property taxes for residents who meet the following requirements:
- Alabama resident
- Over the age of 65 whose adjusted gross income is less than $12,000 or
- Retired due to permanent and total disability, regardless of age or
- Blind, regardless of age or whether they are retired

A homestead defined as the single-family owner-occupied home and the land it is on, not exceeding 160 acres. The property owner must own and occupy it as their primary residence on the first day of the tax year they are applying for an exemption. For more information, please contact the Alabama Department of Revenue County Offices where the property is located for more information and to apply.

Homes of Veterans or Unremarried Surviving Spouses Acquired under a Special Adapted Housing Grant are Exempt from Ad Valorem Taxes: The home of a Veteran or their Surviving Spouse that is acquired through a VA Specially Adapted Housing Grant, regardless of its value, is exempt from all Alabama property taxes.
Vehicles Paid for by a U.S. Department of Veterans Affairs Grant is Exempt from all License Fees and Property Tax: Vehicles owned by disabled Veterans that are all or partly paid for by the VA are exempt from all license fees and property taxes. The vehicle must only be used for the private use of Veteran.
Who is eligible for License Fees and Property Tax Exemptions for Vehicles Paid for by VA Grant? Any vehicle owned by a Veteran who was disabled in any U.S. war, conflict or hostilities against a foreign country that is all or partly paid with funds from the VA to accommodate the Veteran’s disabilities is exempt. For more information, please contact the Alabama Department of Revenue County Offices where the vehicle is located for more information and to apply.

SALES TAX:

Statewide: 4.0%
Counties: can levy a sales tax of no more than 7.5%
Current average sales tax (with local taxes included): 9.25%

Alabama Military and Veteran Motor Vehicle Division Benefits

Veteran Designation on Alabama Driver License: Alabama Veterans have the option to display proof of military service on their driver’s license. There is no charge for the Veteran designation for a first-time driver’s license applicant or when renewing a license. Veterans who add the designation before their renewal date must pay the standard fee for a duplicate license.
- Who is eligible for a Veteran Designation on Alabama Driver’s License? Veterans who received an Honorable or General Under Honorable Conditions Discharge are eligible.
Alabama Vehicle Privilege or License Tax and Registration Fee Exemption for Reserve Component Service Members, Retired Service Members, and Gold Star Families: Alabama offers a Vehicle Privilege or License Tax and Registration Fee Exemption for eligible reserve component Service members, Disabled Veterans, retired Service members, and Gold Star Families.
- Who is eligible for Alabama Vehicle Privilege or License Tax and Registration Fee Exemption for Reserve Component Service Members, Retired Service Members, and Gold Star Families? The following resident individuals are eligible for the exemptions:
  - Active and retired Alabama National Guard Service Members
  - Active members of the U.S. Armed Forces Reserve
  - Gold Star Families
  - Disabled Veterans (applies not only to the Disabled Veteran license plate but may be applied to any license plate the Veteran qualifies for)
Alabama Disabled U.S. Army Veteran License Plate: The Alabama U.S. Army Disabled Veteran license plate is available for Veterans who meet one of the following eligibility requirements:
- 10% to 50% disability rating – first license plate is exempt from registration fees. For subsequent license plates, registrant must pay all applicable registration fees and license plate issuance fees.
- 51% or higher disability rating or their vehicle has special mechanical control devices – first license plate is exempt from registration fees. Annual fee of $5 for subsequent plates (may be used on pleasure vehicles greater than 12,000 lbs.)
- Vehicle is all or partly paid for by the VA – All license plates are exempt from registration fees and taxes.
Alabama Commercial Driver License (CDL), Military Skills Test Waiver: Service members who are currently licensed or were employed within the past year in a U.S. Armed Forces transportation unit requiring the operation of a military motor vehicle equivalent to a commercial motor vehicle are eligible for a military skills waiver when applying for a CDL. Service members must take the knowledge portion(s) of the CDL test, but the skills test will be waived. The form to have the skills portion waived is available at an Alabama Driver License Office and should be requested at the time the knowledge test(s) are being taken.

Recreation

Discounted Fishing License: Discounted freshwater and saltwater fishing licenses are available to Alabama Resident Veterans with at least a 20% disability rating.

Discounted Hunting License: Veterans who have a 40% or greater disability rating.

Alabama 50% Disabled Military Veteran’s Appreciation Hunting License: VetOff Alabama resident Veterans who have a 50% greater disability rating from the VA can purchase a reduced price annual hunting license for $15.65.

Alabama 100% Disabled Military Veteran’s Appreciation Hunting License: Alabama resident Veterans who have a 100% service-connected, permanent and total disability rating from the VA can purchase a reduced price annual hunting license for $3.30.

Alabama Disabled Veteran’s Appreciation 3-day Event Hunting License: Organizations that sponsor hunting events in Alabama for disabled Veterans can purchase a three day hunting license for up to 10 Veterans for $152.55.

Alabama 20% or more Disabled Military Veteran’s Appreciation Fishing Licenses: Alabama resident Veterans who have a 20% or more disability rating from the VA can purchase an annual freshwater or saltwater fishing license for $3.30 each.

Alabama Parks for Patriots Program for Veterans and Active Duty Service Members: The Alabama Parks for Patriots Program offers free admission to Alabama State Parks for resident Veterans and active duty Service members.

Nonresident Service members and Veterans are authorized free admission only on state and federal holidays.

Free Alabama Pistol Permit for Retired Service Members: Retired Service members are eligible for a free Alabama pistol permit. Applicants must still meet all other requirements.

Education Programs

Alabama National Guard Education Assistance Program: The Alabama National Guard Education Assistance Program (ANGEAP) provides tuition assistance to eligible National Guard Service members who are enrolled in an Alabama State Supported School. The current award amounts are $5,687 per semester, or $3,791.33 per quarter. ANGEAP covers tuition and fees that are not covered by any VA education benefits.

Alabama GI Dependents Scholarship Program: Alabama offers varying duration scholarships for eligible dependents of resident disabled Veterans. These scholarships are available for use at any Alabama State Supported School for undergraduate courses at the in-state tuition rate. The scholarship will pay $250 per semester hour and up to $1,000 for textbooks and applicable fees for each semester. Schools may waive any overages of these charges at their discretion.

Children and stepchildren of qualified Veterans receive five standard academic years (10 semesters).
Spouses or unremarried Surviving Spouses of a Veteran who is 100% permanently and totally disabled are eligible for five standard academic years (10 semesters).
Spouses or unremarried Surviving Spouses of a Veteran rated 40-90% disabled are eligible for three standard academic years (six semesters).

All scholarships and grants must be applied to education expenses first and the G.I. Dependents Scholarship Program will be applied for any remaining charges.

Military Service Requirement: The Veteran must have been honorably discharged after at least 90 days of continuous active duty service in the U.S. Armed Forces or was honorably discharged after serving less than 90 days due to a service-connected disability.

Disability Requirements: Veterans must meet one of the following requirements:

40% or more service-connected disability rating from the VA
Former Prisoner of War
Declared missing in action
Died as the result of a service-connected disability, or
Died in the line of duty while service on active duty in the U.S. Armed Forces

Alabama Tuition Waiver for Purple Heart Medal Recipients: Alabama State Supported Schools, offer a waiver of tuition and fees for recipients of the Purple Heart Medal who are pursuing an undergraduate degree. This waiver is for up to 125% of the required credit hours for the degree or certificate program the Veteran is enrolled in. The Veteran must be enrolled as a full-time, part-time, or summer school student in an undergraduate program that culminates in a degree or certificate, and the Veteran was an Alabama resident at the time they were awarded the Purple Heart.

This waiver is only available after all other educational benefits are used, except for benefits that are partially funded by the Veteran, such as the Montgomery GI Bill or Post 9-11 GI Bill.

Alabama Operation Recognition, High School Diplomas for Wartime Veterans: Veterans who left high school before graduating to serve in the U.S. Armed Forces can receive high school diplomas. The Veteran must have served at any time between the following dates:

December 7, 1941, through January 1, 1946
June 27, 1950, through January 31, 1955
November 15, 1961, through March 28, 1973

Veterans must have been a resident of Alabama when they entered the U.S. Armed Forces and must have received an honorable discharge.

Alabama Interstate Compact on Educational Opportunity for Military Children: 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 district or variations in entrance or age requirements
Facilitating the student placement process through which variations in attendance requirements, scheduling, sequencing, grading, course content, or assessment do not disadvantage children of military families
Facilitating the qualification and eligibility for enrollment, educational programs, and participation in extracurricular academic, athletic, and social activities
Facilitating the on-time graduation of children of military families
Providing for the promulgation and enforcement of administrative rules implementing the provisions of this compact
Providing for the uniform collection and sharing of information between and among member states, schools, and military Families under this compact
Promoting coordination between this compact and other compacts affecting military children
Promoting flexibility and cooperation between the educational system, parents, and the student to achieve academic success for the student

Alabama Purple Star School Program for Military-Friendly Schools: The Alabama Purple Star School program recognizes schools that show a commitment to students and families connected to the U.S. Armed Forces. Schools that earn the award receive a special Purple Star recognition to display on site.

For a school to qualify for the Purple Star Award, they must appoint a school liaison trained to handle the unique challenges experienced by military families. This liaison ensures that other teachers at their school are aware of special considerations that students from military families can benefit from. Each school will also have a dedicated page on their school website featuring resources for military families.

Housing: The following are the sites for Veterans Homes

Alabama State Veterans Home at Alexander City

Alabama State Veterans Home at Huntsville

Alabama State Veterans Home at Bay Minette

Alabama State Veterans Home at Pell City

Eligibility for admission:

Veterans must have an honorable discharge and served at least 90 days on active duty
Veterans who enlisted after September 7, 1980, and those commissioned after October 16, 1981, must have served a minimum of 24 continuous months or the full period of their service obligation
Meets VA requirements for skilled nursing care or domiciliary/assisted living
Alabama resident for 12 months prior to application
Must have had a medical examination by a physician that indicates the Veteran does not have:
- Care needs the Veterans Home cannot provide
- Behavioral traits considered dangerous
- Diagnosis or confirmed history of mental illness or mental retardation that outweighs their medical condition
Meets Alabama immigration law requirements

Employment and Job Training: Veteran’s Preference

All persons honorably discharged from the United States Armed Forces at any time shall have 5 points added to any earned ratings in the examination for entrance to the state classified service. Honorably discharged Veterans with the present existence of a service-connected disability and entitled to pension, compensation, or disability allowance under existing laws shall have 10 points added to any earned ratings. Spouses and Surviving Spouses of specific disabled or deceased Veterans may have the 10-point preference extended to them and add to any earned ratings. Veterans also receive preference on the classified service employment registers over non-Veterans with the same ratings.

Alabama State Employee Leave of Absence for Military Service: State employees receive 21 days of absence per calendar year for military service without loss of pay, time, annual vacation, or sick leave. State employees that are active members of the Alabama National Guard or Reserves, on orders for training or active duty.

Alabama State Employee Job Status and Reemployment Rights: Those state employees who are not in the classified service, upon being called into or entering the military service, shall have the same rights and privileges as to reemployment by the state or any department thereof as are granted to those employees in the classified service. State, county, and municipal officials, who enter the military or naval service when a state of national emergency has been declared to exist by the President of the United States, have preservation of job status and reemployment rights. Any teacher entering military service at a time when there is an existing state of war between the United States and any other country shall be granted a leave of absence for the duration of the war and until the beginning of the school year next succeeding the date on which said the teacher is released from military service. Any teacher entering the United States military service who is not on continuing service status but who has accumulated one or more years of teaching experience immediately before entering military service shall be given credit for such experience if such teacher is reemployed within one year after release from military service.

Membership in Alabama State Employees’/Teachers’ Retirement System Benefits for Service Members: Retirement benefits rights of state employees and teachers who enter the Armed Forces and return to state employment within one year after discharge are preserved and may be granted credit for military service up to four years. A member who entered the Armed Forces and does not withdraw contributions and who returns to employment within one year after being honorably discharged. Additionally, provided the Veteran pays an amount equal to 4% of the average compensation paid to a state employee during each claimed year of full-time military service, plus and with 8% interest compounded from the last date of such claimed military service. The contributions must be made within a period equal to the length of service in the Armed Forces or before attainment of age 60, or in the case of a state policeman, age 56, whichever occurs first. No credit for military service shall be granted if such a member receives military service retirement benefits.

Alabama Peace Officers Credit for Military Service: Any peace officer who becomes a member of the Alabama Peace Officers’ Annuity and Benefit Fund who left employment and entered directly into the Armed Forces of the United States and who returns to work as a peace officer within six months after release or discharge shall receive prior employment service credit for service in the military not to exceed five years.

Alabama Business and Occupational License Exemptions for Disabled Veterans: Any bona fide permanent resident of Alabama who is a Veteran of WWII or at any time past, present, or future when the United States was, is or shall be engaged in hostilities with any foreign state and who has physical disabilities of 25% or more whether service-connected or not, may be exempt from business or occupational license taxes. A Veteran who conducts his/her business as a means of livelihood through his/her efforts and has no more than one employee shall be entitled to licenses from the state/county/municipality to carry on such business upon the payment of license taxes that shall not exceed $25.00. However, a Veteran whose property (both real and personal) is valued at $5,000.00 or more or whose net income is $2,500.00 or more is not entitled to these business and occupational license exemptions.

Uniformed Services Employment and Reemployment Rights Act: Uniformed Services Employment and Reemployment Rights Act (USERRA) protect civilian job rights and benefits for Veterans and members of Reserve components. USERRA also makes major improvements in protecting service member rights and benefits by clarifying the law, improving enforcement mechanisms, and adding Federal Government employees to those employees already eligible to receive the Department of Labor assistance in processing claims.

Burials and Memorials

Please note that your preference regarding burial in a national cemetery and using a headstone provided by VA should be documented and kept with your paperwork and medical records. Eligibility for interment in the State Veterans Cemetery follows National Cemetery Administration eligibility requirements. In general, Veterans discharged under conditions other than dishonorable, and their spouses and dependent children are eligible (residency requirements exist). A fee for spouses or dependent children will be charged on the day of interment. For Veterans, there is no cost. Spouses remain eligible even if they remarry.

National Cemeteries include:

Ft. Mitchell: Fort Mitchell National Cemetery

Mobile: Mobile National Cemetery

Montevallo: Alabama National Cemetery

Alabama VA Benefit Resources

Alabama provides Veterans with a Regional Benefits Office and VA Medical Centers.

Alabama VA Regional Benefits Office

Montgomery: Montgomery Regional Benefit Office

Alabama VA Medical Centers

Birmingham: Birmingham VA Medical Center
Montgomery: Central Alabama Veterans Health Care System West Campus
Tuscaloosa: Tuscaloosa VA Medical Center
Tuskegee: Central Alabama Veterans Health Care System East Campus

Important information for Alabama Veteran Benefits:

For Veterans applying for VA benefits for the first time, you must submit a copy of your DD 214 (discharge paperwork). This will provide your discharge status, full name, social security number, branch of service, and dates you served. Honorable and general discharges qualify a Veteran for most VA benefits.

You should always keep your paperwork and medical records in a safe place where you and your family can access them. It is imperative to have it in a location where it cannot be destroyed or tampered with, which includes a safe.

Your eligibility for most VA benefits is based upon discharge from active military service under other than dishonorable conditions. Active service means full-time service as a member of the Army, Navy, Air Force, Marine Corps, or Coast Guard or as a commissioned officer of the Public Health Service, the Environmental Services Administration, or the National Oceanic and Atmospheric Administration.

Any Veteran discharged from the military under the conditions of “Dishonorable” due to bad conduct discharges issued by general courts-martial may bar VA benefits. Veterans in prison and parolees may be eligible for certain VA benefits. VA regional offices can clarify the eligibility of prisoners, parolees, and individuals with multiple discharges issued under differing conditions.

*This information is accurate as of October 2023

Alabama Veteran Benefits

If you are a disabled Veteran in Alabama and are VA-rated 90% or less, you may be eligible for additional benefits. Contact Veterans Guardian to sign up for a free consultation with no obligation. Let us review your claim to determine whether you qualify for additional benefits.