Disabled Veteran Homestead Property Tax Credit

Directive Regarding 2014 Administration of the Disabled Veteran Tax Credit Claims

Application Form

 

Press Release - Expanded Disabled Veteran Homestead Property Tax Credit Filing Deadline Nears

Frequently Asked Questions

1. Annual Filing Questions

2. Application Process

3. Applicants Receiving Other Tax Credits

4. Assessment Questions

5. DD214 Questions

6. Disability Questions

7. Documentation Questions

8. Other Questions

9. Property Questions

10. Surviving Spouse or Dependent Questions

 

1. Annual Filing Questions

1.1 Has this changed to an annual sign up?                  

Yes, after meeting with VA representatives and discussing the various situations that exist, an annual reapplication is required.

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1.2. I have a Disabled Veteran Tax Credit applicant who files yearly to show me income.  Does the applicant need to file next year or can the current application carry on?

The application for Disabled Veteran Tax Credit must be filed each year.  The income requirement is no longer applicable. 

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1.3. Can the assessor require annual reapplication?

Yes, the annual reapplication is required for the credit.

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1.5. Because this application is a yearly sign up, if the person misses or forgets to renew, what do we do about the homestead and/or military exemption that they would be getting annually?  Are we having to watch these and if they don't reapply for the DVTC we put on the homestead and/or military credits?

There is only one homestead credit but under 425.15 if the disabled veteran is already allowed a homestead credit under chapter 425, the veteran gets a 100% credit if conditions are met.  If those conditions are not met, then the standard homestead would apply.  They would not need to reapply for the underlying homestead.  A reapplication for a military exemption would be required however because this is an exemption and the language specifically excludes property owners from receiving additional exemptions under 425.15.

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2. Application Process

2.1. What is the filing deadline?

The filing deadline for the application is July 1st of the current assessment.  Applications received after July 1st would apply to the following assessment year.  For this first year applications are to be accepted by July 1st and any necessary accompanying documentation may be accepted through September 2, 2014.  All applications should be accepted and determination of qualification made after September 2nd for final Board of Supervisor approval.

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2.2. I have received an application for the Disabled Veteran Tax Credit but the accompanying documentation is from 2007.  Am I correct that such supporting information needs to be dated within the past 12 months?

Yes, all supporting documentation verifying the 100% service connected disability rating must be within the last 12 months.  In some cases these ratings may change.  As a result, the reapplication is required annually with current documentation.

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2.3. I am wondering if we can accept the first version of the disabled veteran’s credit application.

The initial application that has been modified may be accepted this first year. The assessor does, howeve,r have to evaluate the application based on the criteria of 100% service connected disability. Individual un-employability of 100% does not on its own grant approval. The applicant must have a service connected disability rating of 100% to qualify.

As long as the information you retained was current and had the information stating 100% service connected disability rating and it was from the US Veterans Affairs it is sufficient.  The veteran does NOT need to provide the benefit award record which contains personal health information.  They only need to provide a benefits record which can be obtained through either a telephone call to 800-827-1000 or through their e-Benefits account online.

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2.4. Can the general public see the veteran’s application and supporting documentation, meaning its public record?

Applications for Disabled Veteran Tax Credits are public record.  The applicant will need to be aware to limit the provision of private health related information and redact any social security numbers or information from the supporting documentation.

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2.5. What are DIC payments?

DIC payments are Dependency and Indemnity Compensation payments to surviving spouses and dependents.

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2.6. We had 4 homeowners that had qualified for the Disabled Veteran Tax Credit who have already signed up for the 2014 tax year before the new law was passed.  Are they required to provide either a Benefit Summary Letter or Benefits Verification Letter to qualify for this year & do we need to contact these homeowners & request them to get a letter?  They previously qualified under past rules.  I understand for the 2015 tax year they will need those documents but wasn't sure if we could just let them get by this year since they had already signed up.

As long as you have documentation that the application has a 100% service connected disability or that the home was attained through the VA they do not need to reapply. Otherwise you will need to obtain the appropriate documentation current within the last 12 months. The first tax year associated with this credit is the 2015/16 for the 2014 assessment.

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2.7. Can a spouse of a 100% disabled service related veteran sign the application for his or her husband?

Under Iowa Statutes 425.2 the spouse or a member of the veteran's family may sign the application.

3. Applicants Receiving Other Tax Credits

3.1. If we get a new application, and the applicant has previously applied for a homestead and/or military do we remove that credit and/or exemption?

A qualifying person who elects to secure the credit provided in this section is not eligible for any other real property tax exemption provided by law for veterans of military service.  If the applicant does not annually re-apply for the disabled veteran’s additional homestead benefit and had been receiving a homestead prior to this additional benefit, the applicant would be entitled to receive their original homestead without reapplication.

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3.2. We had two people in our office this morning and they said they had no such thing as a Benefits Paid letter, a Benefits Summary Letter or a Benefits Verification letter.

The names of the documents provided to veterans will depend upon the office from which they receive the document.  From the E-Benefits online account the names of the documents are as indicated.  As long as the veteran provides a document indicating the service connected disability rating of 100% from the US Veterans Affairs Office the document can be accepted as proof.

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4. Assessment Questions

4.1 Is the application we receive before July 1, 2014 for the 2014 assessment? 

Yes.

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4.2. What year taxes will the exemption impact?

The first year taxes that the credit will impact would be the 2015/16.  The first year available is the 2014 assessment if application is made by July 1, 2014 and approval is granted.

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4.3. Will the first eligible year be applied to the 2014 assessments or the 2015 assessments?  Somehow I seemed to have missed when it starts.

The first year applications received by July 1, 2014 are for the 2014 assessment.  Applications received after July 1, 2014 applies to the 2015 assessment.

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5. DD214 Questions

5.1. If the DD214 is recorded in our county can we just use the book and page as evidence, or must we attach a copy of the DD214 to the application.  Many vets are not comfortable with giving us the form even if we redact the SS number.

If the assessor verifies the DD214 is recorded and that the document is for the applicant noting the book and page on the application would be sufficient.

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5.2. Does the veteran need to have their DD214 discharge papers recorded in the county they are claiming the Homestead Credit? 

There is no requirement that the supporting documentation that accompanies the application for the Disabled Veteran Tax Credit be recorded.  The Military Service exemption under Ch. 426A requires the documentation be recorded, so we can assume that is not a requirement for the DVTC because the law is silent.  Once the veteran has provided documentation of the DD214 in the first year they no longer need to provide this evidence. 

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5.3. If we need to have their DD214, on the form should we have a place to put the recording book & page like the military form?  Or do we attach a copy of that to the form?

The assessor could document the book and page in the assessor portion of the application if it is recorded in the county in which the applicant is applying.  If the document is not recorded a copy of the DD214 will need to accompany the first application.

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6. Disability Questions

6.1. Does a temporary rating of 100% qualify for the credit?

If the documentation of the temporary 100% service connected disability rating is current at the time of application the applicant would qualify for the Disabled Veteran Tax Credit.  The applicant will need to reapply with new current documentation for the next year and the service connected disability rating would need to be 100% for the qualification to continue.

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6.2. I receive 100% compensation because I have 100% individual un-employability.  Do I qualify for the exemption?

Under the current language of Senate File 2352 only veterans that have a service connected disability rating of 100% qualify for the credit.  If your service connected disability rating is less than 100% you do not qualify.

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6.3. I've had the question raised that if a veteran is not 100% disabled, but is 100% unemployable, they qualify for the credit.  Our local VA administrator believes this.  Does the  DOR have a position on this?

A veteran must be rated 100% serviced connected disability.  If an individual has an individual un-employability rating of 100% but does not have a 100% service connected disability rating of 100% they do not qualify for the credit. 

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6.4. Could you tell me which number I am to look at to decide if they qualify?  The combined service-connected evaluation is 60% but he is being paid at the 100% rated because he is unemployed due to his service-connected disabilities?

You must look at the combined service connected disability rating.  The individual un-employability rating is not relevant for the determination of qualification.

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7. Documentation Questions

7.1. What kinds of documentation are acceptable?

1a: If they qualify under 1a; USC Chapter 38 they would have to provide documentation that they received assistance in purchasing or remodeling their property USC 21.801, 21.802 or 2101, 2102.

1b, 1c: For persons qualifying under 1b or 1c verification from the US Department of Veterans Affairs indicating a combined total 100% service connected disability or a Benefits Summary Letter or a Benefits Verification Letter through E-Benefits is sufficient documentation.   They would also have to provide a DD214 with the initial application to show that they meet the requirements of section 35.1.

1d: The owner of the homestead if a surviving spouse or child receiving DIC payments qualifies under 1d of the new language and documentation of DIC payments is sufficient to qualify. The surviving spouse or child is required to reapply annually and to provide proof that he or she continues to receive DIC benefits with each application.  

2a: If a veteran qualifies under 1a, 1b or 1c, their surviving spouse as the beneficiary of the veteran’s estate may continue to receive the credit unless they remarry or change homesteads.  Documentation that the veteran was 100% service-connected disabled at the time of death or that the homestead was obtained through the VA under 1a.

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7.2. My understanding from our veteran’s service officer is that the DIC spouse receives only one letter notifying that they have been approved for DIC and the only other notification would be about COLA changes to the benefit amount.  Are they to apply annually and do they have to provide documentation each year?

Yes, they must reapply each year and provide documentation that they are continuing to receive DIC payments as well as state whether they have remarried or not.  Spouses of deceased veterans that qualify under this legislation do not qualify if they remarry.  Upon request from the Federal Deptartment of Veterans Affairs the spouse can receive an updated letter similar to the veteran requesting an annual letter in regards to his or her receiving their letter for the 100% service connected rating. 

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7.3. It seems to be an issue to get a letter dated within the past 12 months from the local VA office.  I've talked to our local VA about this and they indicated there is only one letter issued.  They are willing to assist veterans to get a current letter but don’t know how this can be accomplished.  Below is the response for our local VA.  "I don't know how to explain it to the Dept. of Revenue.......but the VA will not send a letter dated within 12 months of your application date.  They provide ONE benefit letter, which is mailed when the decision was initially made."

The local VA or the veteran can call 800-827-1000 for assistance and request a current benefits rating letter.  They can also go to E-Benefits online and obtain either a Benefits Summary Letter or a Benefits Verification Letter.

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8. Other Questions

8.1. Is this credit going to be backfilled by the state through the homestead credit process?

The disabled homestead monies are part of the appropriation for homesteads paid by the State of Iowa.

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8.2. Do the other portions of Iowa Code Section 425.15 still apply?  Specifically the income not to exceed $35,000?

The disabled homestead monies are part of the appropriation for homesteads paid by the State of Iowa. The income requirement was removed and the original language was cahgned by SF 2352.

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8.3. How do I know if their homestead was acquired under 38 U.S.C. 21.801, 21.802 or 38 U.S.C. 2101, 2102?

The veteran should be able to provide some kind of documentation from the US Department of Veterans Affairs indicating the VA's participation in either the purchase or the improvements to the home for the disability needs.

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8.4. What do income from security of state and other political subdivisions exempt from federal income tax refer to?

The language you are referring to was removed from Iowa Code as a result of Senate File 2352.  Please refer to the new language.

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8.5. What is the new code section that I can cite that extinguishes the income requirement?

Please refer to Senate File 2352 enrolled bill.  The code language is not updated yet.

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9. Property Questions

9.1. Can the credit only be applied to the 40 acres with the house even if they own more acres?  Many of our agricultural parcels have been re-platted into legally described lots that end up being much smaller or much larger than 40 acres.

Iowa Code section 561.2 defines the amount of property that qualifies for homestead treatment and these same definitions apply to the Disabled Veteran Tax Credit.  For properties located within city limits the maximum size is 1/2 acre where the home and the buildings if any are located.  For properties located outside the city limits the maximum size is 40 acres which includes the house and any buildings.  In either case if the valuation is less than $500 it may be enlarged until it reaches that amount.  The Disabled Veteran Tax Credit would only apply to the home in which the applicants live and any other dwellings on the property would not qualify.

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9.2. Our ag dwellings are a separate record.  Does this exemption apply to just that parcel or would it also apply to the ag land parcel (including out buildings) that the dwelling sits on?  Thanks.

The Disabled Veteran Tax Credit would apply to both the land and out buildings up to 40 acres.  It would not apply to any other dwellings on the property except for the dwelling in which the applicant lives.

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9.3. Is there any limit on the value of the homestead?  A disabled veteran 100% permanently disabled owns a $750,000 house and all taxes ($11,524) will now be wiped out by this new legislation?

The size of the homestead is limited to 1/2 acre in the city limits and up to 40 acres outside of the city limits.  The language in 561.2 or 425.15 does not reference valuation limitations.

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9.4. A 100% permanent disabled veteran owns two 40 acre parcels (adjoining/continuous).  One 40 acre parcel contains the dwelling that he lives in and claims for a homestead.  Does he get 100% homestead credit on all of the property that he owner (all 80 acres ($2,826), or just the 40 acres that dwelling sits on, or a portion of the 40 acres (building site)?

The disabled homestead credit is applied to a maximum of 40 acres if located outside the city limits and it can only cover the dwelling in which the applicants live and any out buildings on the parcel.  It is not allowed on any other dwellings on the property.

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9.5 Can the credit only be applied to the 40 acres with the house even if they own more acres?  Many of our agricultural parcels have been re-platted into legally described lots that end up being much smaller or much larger than 40 acres. 

Iowa Code section 561.2 defines the amount of property that qualifies for homestead treatment and these same definitions apply to the Disabled Veteran Tax Credit.  For properties located within city limits the maximum size is 1/2 acre where the home and the buildings if any are located.  For properties located outside the city limits the maximum size is 40 acres which includes the house and any buildings.  In either case if the valuation is less than $500 it may be enlarged to until it reaches that amount.  The Disabled Veteran Tax Credit would only apply to the home in which the applicants live and any other dwellings on the property would not qualify.

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9.6. Can a disabled veteran receive the credit if they are not the owner of the home?

The veteran must be an owner to qualify for the credit.  If the property is only in the spouse’s name the property would not qualify for the credit because the veteran is not the owner.

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9.7 Are homes sitting on land owned by someone else (building on leased land) eligible for the disabled veterans homestead credit?

Buildings on leased land do not qualify.

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10. Surviving Spouse or Dependent Questions

10.1. Do surviving spouses of veterans qualifying for the Disabled Veteran Tax Credit continue to qualify for the exemption?

Surviving spouses receiving DIC payments that have not remarried, qualify for the Disabled Veteran Tax Credit.  Surviving spouses that remarry do not qualify. 

Surviving spouses that qualify under 2a continue to receive the benefit if they are the beneficiary of the veteran’s estate, do not change homesteads, and remain unmarried regardless if they are receiving DIC payments. 

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10.2:  Do surviving spouses that are receiving DIC payments qualify for the veteran’s homestead credit even if their spouse was not 100% service connected disability rating?

Yes, surviving spouses that are receiving DIC payments and that have not remarried qualify for the credit.  Receiving DIC payments means their spouses death was service connected.  They are not required to have a 100% service connected disability rating as they qualify under 1d.

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10.3. Our Veteran's Affairs administrator has just brought down an application for the disabled veteran tax credit.  He has passed away due to a service related injury, and his spouse is applying for the credit.  Does she need any other paperwork besides the benefits paid letter?  If this is all she needs, would it then become a permanent credit, as he will obviously not be getting a benefits paid letter each year after he has passed away?  In regards to the e-mail I just sent you; they brought a (DIC) dependency and indemnity compensation form that has given her permanent benefits.  This letter was dated 4/14/14.  Would this take the place of the benefits summary letter, and then be permanent?

The applicant will need to provide documentation that she is receiving DIC payments and complete an application annually.  If she remarries she will not qualify under current law.  See answer to Question 2 regarding a spouse who qualifies under 1d.

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10.4. Can a widow of a deceased veteran qualify if she doesn’t have the same last name as the veteran?

If they qualify under 1d and are receiving DIC, they are noted as the surviving spouse or child on the document.

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10.5. Can an adopted child of a deceased veteran receiving DIC payments receive the credit?

The adopted child would have to first have to be established as the owner of the property to qualify.  If the child is not an owner they property would not qualify for the credit.

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