Alabama Veteran Financial Benefits

Military Retirement Pay Exemption
Retired service members enjoy full exemption from Alabama state income tax on their military pension.

Thrift Savings Plan (TSP) and State Taxes
While the TSP doesn’t withhold state or local taxes, distributions are subject to state taxation and are reported via IRS Form 1099-R. Early withdrawals could result in steeper tax obligations.

Combat Pay Exclusion
Military earnings received in a President-designated combat zone are not taxed by the state.
Who qualifies?
Service members earning pay for duties in such combat zones qualify for this tax-free status.

Military Pay and State Taxation
Alabama requires resident service members to pay income tax on their basic pay, excluding allowances for housing, meals, uniforms, or travel.

VA Disability and Tax Exemptions
VA Military Disability Retirement Pay is not included in Alabama’s taxable income. This includes:

• Compensation or pensions for service-connected disabilities
• Housing grants for wheelchair-accessible homes
• Vehicle grants for disabled veterans
• Dependent care assistance benefits

VA DIC Payments
Dependency and Indemnity Compensation (DIC), paid to survivors of fallen service members or veterans who died due to service-related conditions, is fully tax-exempt in Alabama.

Survivor Benefit Plans
Alabama exempts Survivor Benefit Plan (SBP), Reserve Component SBP (RCSBP), and Retired Serviceman’s Family Protection Plan (RSFPP) payments from income tax.

Homestead Exemption for Seniors and Disabled
Homeowners who are Alabama residents may qualify for full property tax exemption if they:

• Are 65 or older with under $12,000 AGI, or
• Have a total, permanent disability (income doesn’t matter)

The exemption applies to owner-occupied homes up to 160 acres used as the primary residence. Contact your local county revenue office to apply.

Specially Adapted Housing for Veterans
Homes obtained through a VA Specially Adapted Housing Grant are exempt from all property taxes in Alabama, no matter the property value. Applies to both veterans and their unremarried surviving spouses.

Vehicle Tax Relief for Disabled Veterans
Vehicles that were fully or partially funded by a VA grant and used privately by a disabled veteran are exempt from both license fees and property taxes.

Eligibility:
The exemption applies to vehicles of veterans disabled in any U.S. conflict, provided the vehicle was VA-funded to meet the veteran’s accessibility needs. Apply through the local revenue office.

Alabama Sales Tax Overview

• State rate: 4.0%
• County rate cap: 7.5%
• Combined average rate: Around 9.14%

Alabama Vehicle and License Benefits for Veterans and Military Members

Veteran Status on Driver’s License
Alabama veterans can request a “Veteran” designation on their state driver’s license as proof of military service. It’s free during initial issuance or regular renewal. If added outside the renewal cycle, the standard duplicate license fee applies.
Eligibility: Veterans with an Honorable or General Under Honorable Conditions discharge are eligible.

Exemption from Vehicle Privilege and Registration Fees
Eligible Alabama residents—including Reserve members, retired military, Gold Star families, and disabled veterans—may qualify for exemption from vehicle license taxes and registration fees.
Who qualifies?

• Active or retired Alabama National Guard members
• Reservists in the U.S. Armed Forces
• Gold Star Family members
• Disabled Veterans (for any plate they’re eligible for, not just the DV plate)

Disabled Veteran U.S. Army License Plate Program
Veterans with U.S. Army service and disability ratings may be eligible for registration fee waivers:

• 10%–50% disability: First plate is registration-fee exempt; standard fees apply to additional plates
• 51%+ disability or vehicle with adaptive controls: First plate is free; additional plates cost $5 annually
• Vehicle funded by VA: All registration and plate fees are waived, no matter the number of plates

Commercial Driver’s License (CDL) Waiver for Military
Current or recently separated military personnel with driving experience in military motor vehicles equivalent to commercial trucks may skip the CDL road test. The knowledge portion of the CDL exam is still required.
To apply: Visit any Alabama Driver License Office and request the military skills waiver form when taking the written test.

Outdoor and Recreation Benefits

Resident-Rate Hunting and Fishing Licenses for Nonresident Military
Active-duty nonresident service members and their dependents stationed in Alabama for 30+ days—or living in Alabama for 90+ days while stationed in a neighboring state—can buy hunting and fishing licenses at resident prices.
What you need:

• Military orders showing assignment in Alabama
• A valid U.S. driver’s license
• Military ID
  Apply at your local probate office or license commissioner.
  Note: Those stationed at Fort Benning with a Fort Benning license may hunt/fish on base without an Alabama license but must follow game reporting rules.

Lifetime Hunting & Fishing Licenses for Disabled Veterans
Alabama offers lifetime outdoor licenses at discounted rates for disabled resident veterans. Cost depends on age and VA disability rating.
Eligibility:

• Fishing (freshwater/saltwater): 20%+ VA rating
• Hunting: 40%+ VA rating
  Apply with proof of residency and a VA Benefit Summary Letter, either locally or through the Montgomery conservation office.

Annual Discounted Hunting Licenses for Disabled Veterans

• 50% Disabled: May purchase an annual license for $17.30
• 100% Disabled (Permanent & Total): Eligible for an annual license for only $3.55
  Apply locally, by mail, or at the Montgomery conservation office with VA documentation.

Three-Day Group Hunting Licenses for Events
Veteran organizations can purchase a three-day event license covering up to 10 disabled veterans for $169.55.
Eligibility: Veterans with a 50%+ VA rating.
Applications must be submitted by mail with all required documents.

Fishing License Discounts for Disabled Veterans
Alabama residents with a VA disability rating of 20% or more can purchase:

• Freshwater fishing license: $3.55
• Saltwater fishing license: $3.50
  Proof of Alabama residency and VA rating is required.

Free State Park Admission with Parks for Patriots
Alabama residents who are Veterans or active-duty military receive free entry to all Alabama State Parks year-round.
Nonresidents are granted free admission only on federal and state holidays.
Accepted proof:

• Military ID
• DD214
• Alabama driver’s license with a Veteran designation

Alabama State Parks Free Entry Details

Alabama Educational Benefits for Veterans, Service Members & Their Families

Alabama National Guard Education Assistance (ANGEAP)
The ANGEAP program helps Alabama National Guard members pay for tuition and fees not already covered by VA education benefits.
Award Amounts:

• Up to $6,017.50 per semester
• Or $4,011.67 per quarter

Eligibility Criteria:

• Must be at least 17 years old
• Be an active member in good standing with the Alabama National Guard
• Have completed basic training
• Be pursuing your first undergraduate or graduate degree
• Enrolled in a certificate/degree program at a state-supported Alabama institution
• Maintain a 2.0 GPA (undergrad) or 3.0 GPA (grad)
• File FAFSA and show at least $100 of unmet financial need

Alabama G.I. Dependent Scholarship Program
This program supports dependents of qualified disabled veterans by covering $250 per credit hour, plus up to $1,000 per semester for books and fees at eligible Alabama public institutions.

Duration of Benefits:

• Children/stepchildren: Up to 5 academic years (10 semesters)
• Spouses/unremarried surviving spouses:
  • 5 years for 100% disabled veterans
  • 3 years for veterans with a 40–90% disability rating

Veteran Eligibility Requirements:

• Must have an honorable discharge after at least 90 days of continuous service
• Must meet one of the following:
  • 40%+ VA disability rating
  • POW or MIA
  • Died in service or due to a service-connected disability

Residency Requirements: (Various paths including long-term state residency or recent discharge)

Student Requirements:

• Must be an Alabama resident
• Complete FAFSA annually
• Meet academic progress standards
• Submit a FERPA release
• Start school before age 26 (up to age 30 in certain cases for stepchildren)

Application: Apply through the ADVA G.I. Dependent Scholarship online portal or contact a local Veterans Service Office.

Tuition Waiver for Purple Heart Recipients
Veterans who received the Purple Heart and were Alabama residents at the time of their award are eligible for a tuition and fee waiver at Alabama state-supported schools.

• Covers up to 125% of required credit hours for the degree/certificate program
• Applies after other educational benefits are used (except GI Bill benefits partially funded by the Veteran)

Contact your chosen school for more details.

Operation Recognition – High School Diplomas for Wartime Veterans
Veterans who left high school to serve in:

• WWII (Dec 7, 1941 – Jan 1, 1946)
• Korean War (Jun 27, 1950 – Jan 31, 1955)
• Vietnam War (Nov 15, 1961 – Mar 28, 1973)

…can receive a retroactive high school diploma if they were Alabama residents at enlistment and received an honorable discharge.
Apply through the veteran’s former high school or the County Superintendent of Education.

Military Family Student Support – Interstate Compact
Alabama participates in the Interstate Compact on Educational Opportunity for Military Children, designed to reduce the impact of frequent moves and deployments. The compact ensures:

• Easier school transfers
• Streamlined placement, enrollment, and extracurricular access
• Help with graduation requirements
• Coordination across states and schools

Alabama Purple Star School Program
Recognizes K–12 schools that go above and beyond to support military-connected students.
Requirements for schools include:

• Designating a trained military family liaison
• Providing military-specific resources online
• Raising awareness among staff about military family challenges

To Learn More: Email PurpleStarSchools@alsde.edu

Housing: Locations of Veterans’ Residential Facilities in Alabama

• Alexander City State Veterans Home
• Huntsville State Veterans Home
• Bay Minette State Veterans Home
• Pell City State Veterans Home
• Enterprise State Veterans Home

Eligibility Criteria for Admission

• Completed a minimum of 90 days active duty in the U.S. Armed Forces with an honorable discharge
• Veterans who enlisted after Sept. 7, 1980, or were commissioned after Oct. 16, 1981, must have served at least 24 continuous months or their entire service obligation, with an honorable discharge
• Must meet VA criteria for skilled nursing or assisted living/domiciliary care
• Must have been a resident of Alabama for at least 12 months before applying
• A physician’s exam must confirm the Veteran does not:
  • Require care beyond the facility’s capabilities
  • Exhibit dangerous behavioral traits
  • Have a diagnosis/history of mental illness or intellectual disability that supersedes their physical medical needs
• Must comply with Alabama immigration law requirements

Employment and Job Training: Veteran’s Benefits and Preferences

Alabama Department of Labor Veteran Services
The Alabama Department of Labor provides tailored employment support for Veterans. Services include:

• Resume building
• Interview preparation
• Job search assistance
• Apprenticeship and on-the-job training programs
• Resource referrals
• Priority access to services
• Training opportunities

Alabama State Employee Military Leave
State employees in reserve components of the U.S. Armed Forces are entitled to 168 working hours of paid military leave annually without losing pay or leave time.
Eligibility: State employees serving in the Alabama National Guard or U.S. Armed Forces Reserves on training or active duty orders.

State Employee Job Reinstatement Rights
Unclassified state employees called to service retain the same reemployment protections as classified employees. Those called to active duty during war or national emergencies are guaranteed job status and return rights.

Veterans’ Preference in State Hiring
Veterans and certain dependents receive extra points on state employment exams:

• 5 points: Honorably discharged Veterans
• 10 points:
  • Disabled Veterans
  • Spouses of Veterans unable to work due to service-connected disability
  • Surviving spouses of service members killed in the line of duty

During workforce reductions, preference-eligible employees with equal or better performance must be retained over others.

Private Sector Veterans’ Hiring Preference
Private employers may legally adopt a written policy favoring Veterans in hiring.

Federal Employment Veterans’ Preference
Eligible Veterans receive hiring preference under federal law during hiring and retention:

• 5-Point Preference: For certain wartime or campaign service
• 10-Point Compensable Disability Preference (CP): 10%–29% service-connected disability
• 10-Point 30% Compensable Disability Preference (CPS): 30%+ disability rating
• 10-Point Disability Preference (XP): Any service-connected disability or Purple Heart recipient
• 10-Point Derived Preference: For spouses, surviving spouses, or mothers of qualified Veterans

Veterans must generally meet a 24-month active-duty requirement unless discharged for hardship, disability, or other exemptions.

RSA Military Service Benefits
State employees and teachers returning from U.S. Armed Forces service can maintain Retirement System of Alabama (RSA) benefits.
Eligibility: Must return within one year of honorable discharge and continue contributions. Veterans may purchase up to four years of service credit at 4% of the average state salary per year plus 8% interest.

Peace Officer Military Credit
Peace officers who are Alabama Peace Officers’ Annuity and Benefit Fund members can earn up to five years of service credit after military service if they return to duty within six months post-discharge.

Discounted Business Licenses for Disabled Veterans
Eligible Veterans may pay only $25 for business or occupational license taxes.
Eligibility:

• Alabama resident
• Served during wartime
• 25%+ VA disability (not required to be service-connected)
• Self-employed with no more than one employee
  Exclusion: Veterans with $5,000+ in property or $2,500+ net income are not eligible.

USERRA Protections
The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects service members’ civilian employment rights:

• Up to 5 years of protected military leave (with exceptions)
• Job reinstatement without loss of seniority or benefits
• Reasonable accommodation for disabilities
• Skill retraining if needed
• Continued health plan coverage (up to 24 months)
• Pension protections during military service

Eligibility: U.S. Armed Forces Reserve, National Guard, and Veterans who leave civilian employment for military training or service. Claims may be filed through the U.S. Department of Labor’s Veterans’ Employment and Training Service (VETS).

Burials and Memorials:

It’s important to document and store burial preferences — including choosing a national cemetery and using a VA-provided headstone — with your personal and medical records. Eligibility for burial in the State Veterans Cemetery is based on National Cemetery Administration rules. Generally, Veterans with discharges other than dishonorable, along with their spouses and dependents, qualify (subject to residency rules). There is no fee for Veterans; spouses and dependents are charged a fee on the day of interment. Spouses retain eligibility even after remarriage.

National Cemeteries:

• Ft. Mitchell: Fort Mitchell National Cemetery
• Mobile: Mobile National Cemetery
• Montevallo: Alabama National Cemetery

Alabama State Veterans Memorial Cemetery at Spanish Fort:
Provides a respectful final resting place for Veterans and eligible family members. Services include in-ground burials (casket or cremated remains), columbarium niches, and a scattering garden.

Veteran burials include at no cost:

• Use of the committal shelter (graveside services not provided)
• Burial plot or columbarium niche
• Opening and closing of the site
• Perpetual gravesite maintenance
• Engraved gravestone

Dependent burials:

• $375 fee, plus any other funeral-related costs covered by the family or estate

Eligibility for burial at Spanish Fort Cemetery (follows VA standards, with added AL residency requirement):

• Honorably discharged from active U.S. Armed Forces service, or
• Died on active duty, or
• Completed 20+ years in the National Guard or Reserves and eligible for military retirement (or would have been eligible except for death before age 60), or
• Reservists activated for federal service (active duty training does not qualify)
• Spouses and dependents (unmarried under age 21, under 23 if full-time student, or with a permanent disability before 21)
• Alabama resident:
  • At death, or
  • At enlistment, or
  • For 10 years total (non-consecutive acceptable)

Alabama VA Benefit Resources

Veterans in Alabama have access to a Regional VA Benefits Office and several VA Medical Centers.

Alabama VA Regional Office

• Montgomery: Montgomery Regional Benefits Office

VA Medical Centers in Alabama

• 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 Notes for Alabama Veterans Seeking Benefits:

Veterans filing for VA benefits for the first time need to include a copy of their DD214. This form details service branch, discharge type, dates of service, full name, and Social Security number. A discharge categorized as Honorable or General typically meets eligibility for most VA benefits.

Keep all military paperwork and medical documentation in a secure and accessible place. It’s crucial that these documents are safeguarded against damage, loss, or tampering—ideally stored in a fireproof safe or secure container.

Eligibility for most VA services is based on separation from full-time active duty under conditions other than dishonorable. Active service includes roles in the Army, Navy, Air Force, Marine Corps, Coast Guard, or as a commissioned officer in branches such as the Public Health Service, NOAA, or the Environmental Services Administration.

Veterans discharged with a “Dishonorable” status from a general court-martial may be ineligible for VA benefits. However, some individuals who are incarcerated or on parole might still qualify for specific services. Veterans with multiple discharges under different conditions should consult a VA regional office for guidance on benefit eligibility.

Alabama Veteran Benefits

Disabled Veterans in Alabama with a VA disability rating of 90% or lower may be entitled to extra state benefits. To explore your eligibility, connect with Vital Veterans Consultants for a no-cost, no-obligation consultation. Our team can assess your claim and help identify any additional benefits you may qualify for.

*Information current as of June 2025