Veterans with a 100% rating from the VA for permanent and total disability are exempt from paying property taxes on their homes. This means that they will not have to pay taxes on the home they use as their legal residence.
The History
The Maryland State Codes, MD Tax Property §7-208, has provided tax exemptions for disabled veterans and their surviving spouses since May 31, 2010. The section allows for tax refunds when taxes have already been paid, and for pro-rated exemptions when part of a taxable year still remained after the disabled veteran applied.
This has been amended six times, most recently on June 1, 2021. The most notable changes made were:
- Disabled active-duty service members can apply for tax exemptions, as of June 1, 2019.
- Refunds for authorized exemptions that were not yet granted are no longer optional – the state, county, and municipal corporation must pay refunds back to eligible applicants, as of June 1, 2019.
- The surviving spouse of a veteran who died in the line of duty is now granted tax exemptions, as of April 8, 2014.
Tax Exemption Application Process and Requirements
In order to be exempt from taxes, a veteran must be 100% disabled as rated by the VA. This includes veterans receiving TDIU benefits.
To apply for an exemption from Maryland State Department of Assessments & Taxation, you must first fill out the Application for Exemption for Disabled Veterans. The second step is to attach a copy of the following documents to the application:
- Veteran’s Honorable Discharge or VA DD-Form 214.
- Proof of Maryland Residency, including a valid driver’s license, voter’s registration, or income taxes.
- Veteran’s Rating Decision by the VA, indicating that they are 100% permanently disabled or 100% permanently unemployable.
You then have to file the application and enclosed documents with the Supervisor of Assessments at the local assessment office. Every Maryland county has a local assessment office, and their contact details are included on the application form or available on the Maryland Government website.
Surviving Spouses
In order to qualify for the tax exemption, the surviving spouse of a disabled veteran must remain unmarried or have had any subsequent marriage annulled. It’s important to remember; surviving spouses who remarry and get divorced are not eligible for the exemption. The same requirements for the now deceased veteran apply – which are; the veteran must have been rated at 100% disabled, or 100% permanently unemployable while living, or must receive that rating posthumously.
The application process for surviving spouses is very similar to the application process for the veteran. If you are the surviving spouse of a disabled veteran, you may be eligible for an exemption on your property taxes.
In order to apply, you will need to fill out the Maryland State Department of Assessments & Taxation Application for Exemption for Surviving Spouses of Disabled Veterans.
Make sure you attach a copy of the following documents to your application:
- Veteran’s Honorable Discharge or VA DD-Form 214
- Veteran’s Most Recent Rating Decision by the VA, indicating that the veteran is 100% permanently disabled or 100% permanently unemployable.
- Applicant’s proof of Maryland Residency, including applicant’s driver’s license, income taxes or voter’s registration.
You then need to file the application and attached documents with the Supervisor of Assessments at the appropriate local assessment office.
Refunds and Dates of Eligibility
The steps outlined in the application process above will show you how to apply for tax exemptions, both present and future. If you are a disabled veteran or their surviving spouse, and have previously been authorized to be exempt from property taxes but did not apply, you are due a refund for that time period.
Here are some examples of the requirements for those exemptions.
Disabled Veterans
Scenario One
If a disabled veteran is rated at 100% disabled as of January 2, 2022, they will be eligible for the property tax exemptions from that date onwards.
In order to be eligible for a refund, the disabled veteran must adhere to the following requirements:
- They must apply within three years of becoming eligible. In this specific scenario, they would need to apply before January 2, 2025.
- Make sure that they check the box indicating that they are applying for a refund.
- If they wait until after January 2, 2025 to apply, they will not receive a refund, they will however still be eligible for the exemption.
Scenario Two
If you are a disabled veteran who received a rating decision on January 2, 2022, rating you 100% disabled, yet it’s effective since March 2, 2019, you would be eligible for property tax exemptions starting on January 2, 2022.
In order to be eligible, they have to meet the following requirements,
- The disabled veteran must apply within three years of the date they become eligible. In this scenario, the veteran must apply before January 2, 2025, to receive a refund.
- The disabled veteran must apply using the application process listed above, and additionally must check the box on the application form that indicates that they are applying for a refund.
- If the veteran waits until after January 2, 2025, to apply, they will not receive a refund, but will still be eligible for the exemption, provided all other requirements are met.
Surviving Spouse
Scenario One
If a veteran is rated 100% disabled as of January 2, 2022, both the veteran and their spouse are eligible for property tax exemptions starting on that date. If the veteran dies on or after March 2, 2022, their spouse will continue to be eligible for the exemptions.
- The surviving spouse must apply within three years of the date they became eligible. In this scenario, the spouse must apply before January 2, 2025 in order to receive a refund.
- The spouse must apply using the application process listed above, and additionally must check the box on the application form that indicates that they are applying for a refund.
- If the spouse waits until after January 2, 2025 to apply, they will not receive a refund, but will still be eligible for the exemption, provided all other requirements are met.
Scenario Two
The veteran passes on January 2, 2022, and is rated 100% disabled posthumously on March 2, 2022.
Requirements:
- The surviving spouse must apply within three years of the veteran’s death. In this scenario, the spouse must apply before January 2, 2025 in order to receive a refund.
- The spouse must apply using the application process listed above, and check the box on the application form that indicates that they are applying for a refund.
- If the spouse waits until after January 2, 2025 to apply, they will not receive a refund, but will still be eligible for the exemption, provided all other requirements are met.
Noteworthy Amendment
On February 15, 2022, at the 444th session of the Maryland General Assembly, a bill proposing an amendment to the MD Code Tax-Property 7-208 was introduced.
If the bill passes through the legislative process, being Senate Bill No. 975 which proposes allowing disabled veterans and their surviving spouses who qualify to apply for tax exemption before purchasing a home, in addition to the accepted process of applying for tax exemption after purchasing a home, this amendment will go into effect on October 1, 2022
If you’re having any difficulties in receiving your tax exemption benefits or if you’re struggling to get a refund on your claim, you can contact a seasoned Veterans Advocacy lawyer at the Law Office of Andrew P. Gross.