Hawaii Veteran Financial Benefits
Members of the Hawaii National Guard and U.S. Armed Forces Reserve who receive drill pay for up to 48 drills (equivalent to 12 weekends) and 15 days of annual training, with a pay grade of E-5 or below after eight years of service, are exempt from Hawaii state income tax on that income.
Military pay earned by resident Service members that counts toward their federal adjusted gross income is taxable by Hawaii.
Military retired pay received by Hawaii residents is exempt from state income taxes. While the Thrift Savings Plan (TSP) does not automatically withhold state or local taxes, it is reported annually via IRS Form 1099-R, and all TSP distributions could be subject to state taxes, with early withdrawals possibly resulting in higher tax charges.
Military Disability Retirement Pay from the U.S. Department of Veterans Affairs—paid as a pension, annuity, or similar benefit for injuries or illnesses related to active duty—is generally excluded from Hawaii taxable income. This includes disability compensation, pensions to Veterans or their families, grants for wheelchair-accessible homes, grants for vehicles adapted for Veterans with lost limbs or sight, and dependent-care assistance benefits.
Dependency and Indemnity Compensation (DIC) provided to eligible survivors of Service members who died in active duty or Veterans whose death is linked to service-related causes is tax-free in Hawaii.
Survivor benefit plans such as the Military Survivor Benefit Plan (SBP), Reserve Component Survivor Benefit Plan (RCSBP), and Retired Serviceman’s Family Protection Plan (RSFPP) are not subject to Hawaii state taxes.
Veterans with a 100% service-connected disability rating from the VA qualify for a property tax exemption on their primary residence and land, though counties may have specific conditions or assessments. Proof of honorable discharge and VA disability certification is required. Unremarried surviving spouses of eligible Veterans can also claim this exemption. Property taxes are managed by Hawaii’s four counties, each with their own rates and exemption forms.
Specially adapted vehicles provided by the VA to service-connected disabled Veterans are exempt from all Hawaii passenger vehicle taxes.
Sales Tax Rates:
- Statewide base rate: 4.0%
- Additional county sales tax up to 0.5%
- Average combined sales tax: approximately 4.44%
Recreation
Hunting Licenses: Nonresident active duty Service members and their dependents stationed in Hawaii are eligible to buy hunting licenses at resident rates.
Education Programs
Hawaii Kupono Diploma Program for Wartime Veterans: The Hawaii Department of Education oversees the Kupono Diploma Program, which grants honorary high school diplomas to World War II, Korean War, and Vietnam War-era Veterans who left school early to serve in the U.S. Armed Forces.
Eligibility for the Kupono Diploma Program requires that Veterans:
- Were enrolled in a Hawaii public high school before enlisting
- Received an honorable discharge
- Served during WWII, the Korean War, or the Vietnam War
Veterans with a General Education Diploma (GED) also qualify for an honorary diploma. Diplomas can be awarded posthumously at no cost.
Hawaii Residency for Tuition Purposes for Nonresident Veterans, Service Members, and Dependents: Nonresident Veterans and service members stationed in Hawaii, along with their dependents, qualify for resident tuition rates at Hawaii colleges. Students using VA educational benefits and recipients of the Gunnery Sergeant John David Fry Scholarship are also eligible for these rates.
Hawaii National Guard State Tuition Assistance Program (STAP): STAP offers tuition reimbursement to qualifying Hawaii National Guard members who have completed Basic Combat Training and Advanced Individual Training. It covers full tuition at community colleges and 50% tuition at state universities.
STAP eligibility requirements include:
- Being a Hawaii resident
- Enrollment as an undergraduate pursuing a degree
- Active service in the Hawaii National Guard with satisfactory performance
- Rank of enlisted, warrant officer, or commissioned officer O-3 and below
- Maintaining satisfactory academic standing
STAP can be combined with G.I. Bill and Federal Tuition Assistance benefits.
Hawaii Interstate Compact on Educational Opportunity for Military Children (MIC3): This compact aims to remove educational barriers for military children caused by frequent relocations and parental deployments by:
- Ensuring prompt enrollment without disadvantage from record transfers or differing entrance/age rules
- Supporting fair student placement despite variations in attendance, scheduling, grading, curriculum, or assessments
- Facilitating eligibility for enrollment, educational programs, and participation in extracurricular activities
- Supporting timely graduation
- Enforcing administrative rules for compact provisions
- Promoting uniform sharing of information among states, schools, and military families
- Coordinating with other military family compacts
- Encouraging cooperation between educational systems, parents, and students for academic success
Housing: Below are the locations of Veterans Homes.
Hawaii State Veterans Home at Yukio Okutsu in Hilo
Admission Eligibility:
- Requires skilled or long-term nursing home care
- Must be at least 55 years old (cases under 55 may be reviewed individually)
- Honorably discharged from service
- Resident of Hawaii either before joining the U.S. Armed Forces or for at least one year prior to applying
- Able to cover the resident’s share of care costs
- Spouses, surviving spouses, and Gold Star parents may be admitted if space is available
Admission Priorities:
- Severity of disability
- Ability to earn a living
- Length of military service
- Extent of combat experience
- Immediate family circumstances
Veteran Employment and Job Training Preferences
Military Leave for State Employees in Hawaii:
State and city employees in Hawaii are entitled to 15 days of paid military leave annually for military duty. If needed, they may also use an additional 15 days from the following year.
Military Caregiver Leave:
Hawaii state employees can take up to 26 weeks of unpaid leave in a 12-month period to care for a military family member (spouse, child, parent, or next of kin) who has suffered a serious illness or injury while on active duty.
Uniformed Services Employment and Reemployment Rights Act (USERRA):
USERRA protects the employment rights and benefits of Veterans and reserve members in civilian jobs. It clarifies legal protections, strengthens enforcement, and includes federal employees eligible for Department of Labor support with claims.
- Absence from Work for Military Duty:
USERRA allows up to five years of cumulative military leave while preserving reemployment rights, with exceptions for certain longer enlistments, reserve training, and emergency recalls. Protection applies regardless of the timing or nature of service, as long as basic eligibility is met. - Disability Accommodation:
Employers must make reasonable accommodations for disabled Veterans. Those recovering from service-related injuries have up to two years after service completion to return or reapply for their jobs. - Return to Work Rights:
Returning Service members must be reinstated to their job as if they had not left, maintaining seniority, status, pay, and benefits. Employers are required to provide retraining or skill refreshers as needed. - Health and Pension Plan Coverage:
Service members on duty over 30 days can continue employer-sponsored health coverage for up to 24 months, potentially paying up to 102% of the premium. For shorter service, coverage continues as if the employee had stayed on the job. Pension plans are fully protected. - Eligibility:
Veterans, Reserve, and National Guard members leaving civilian roles for military duty or training are covered. The Department of Labor’s Veterans’ Employment and Training Service (VETS) assists with USERRA claims, including federal and postal workers.
Federal Employment Hiring Preferences for Veterans:
Veterans, especially those with disabilities or wartime service, receive preference in federal hiring and retention, gaining additional points on exams and interviews:
- 5-Point Preference: Veterans who served during wartime or specific periods, or in qualifying campaigns, receive five extra points.
- 10-Point Preferences:
- Veterans with a 10-29% service-connected disability rating receive 10 points.
- Veterans with 30% or more disability also receive 10 points.
- Veterans with a present service-connected disability or Purple Heart recipients get 10 points.
- Spouses, surviving spouses, and mothers of Veterans may also qualify for 10-point preference in specific circumstances, especially if the Veteran is disabled or deceased.
Additional rules apply to service length and eligibility for preference.
Hawaii State Veterans’ Preference for Public Employment:
Hawaii grants hiring preference to eligible Veterans and their spouses for state jobs:
- 5 Points: For honorably discharged Veterans who served during designated periods or campaigns.
- 10 Points: For Veterans with service-connected disabilities, Purple Heart recipients, spouses of disabled Veterans unable to work, and surviving spouses of deceased Service members.
Applicants must provide documentation such as DD214, VA disability awards, and proof of relationship when applicable.
Burials and Memorials
The National Cemetery Administration (NCA) honors eligible Veterans and their families by providing a final resting place and a permanent memorial to recognize the Veteran’s devoted service to the country.
Burial benefits include a gravesite at any open cemetery with available space, grave opening and closing, ongoing maintenance, a government-issued headstone or marker, a burial flag, and a Presidential Memorial Certificate—all provided at no cost to the family. Certain Veterans may also qualify for a burial allowance. Cremated remains receive the same honors and are either interred or inurned within national cemeteries just like casketed remains.
These burial benefits also apply to eligible spouses and dependents, allowing for burial next to the Veteran along with perpetual care of the gravesite. The spouse’s or dependent’s name and pertinent birth and death dates are engraved on the Veteran’s headstone at no charge. Notably, spouses and qualified dependents may be buried even if they die before the Veteran and are not required to be laid to rest in the same national cemetery.
National Cemeteries include:
Honolulu: National Memorial Cemetery of the Pacific
Hawaii VA Benefit Resources
Hawaii offers Veterans access to a Regional Benefits Office as well as a VA Medical Center.
Hawaii VA Regional Benefits Office
- Honolulu: Honolulu Regional Office
Hawaii VA Medical Centers
- Honolulu: VA Pacific Islands Health Care System
Key Details on Hawaii Veteran Benefits:
When applying for VA benefits for the first time, Veterans must submit a copy of their DD Form 214 (discharge document). This form includes essential details such as discharge classification, full name, Social Security number, branch of military service, and dates of service. Most VA benefits are available to Veterans with an honorable or general discharge.
It’s highly recommended to securely store your DD214 and medical records in a safe, accessible place for both you and your loved ones. Protecting these documents from loss or damage—such as placing them in a fireproof safe—is crucial.
Eligibility for the majority of VA benefits hinges on separation from active duty under conditions other than dishonorable.
“Active duty” refers to full-time service in the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard, as well as commissioned officers in the Public Health Service, the Environmental Services Administration, or NOAA (National Oceanic and Atmospheric Administration).
Veterans discharged under “Dishonorable” conditions by a general court-martial are typically ineligible for VA benefits. However, incarcerated Veterans and those on parole may still qualify for certain benefits. For clarification on eligibility in these cases, individuals should contact a VA Regional Office, especially if they have multiple discharges under different conditions.
Information current as of October 2023.
Benefits for Hawaii Veterans
If you’re a disabled Veteran living in Hawaii with a VA disability rating of 90% or below, you might qualify for extra benefits. Reach out to Vital Veterans Consultants for a complimentary, no-obligation consultation. We’ll assess your claim to see if you’re eligible for any additional support.
