Disabled veterans can file federal tax returns at no cost through three government-backed options: the Volunteer Income Tax Assistance program if you earn $69,000 or less, MilTax if you separated or retired within the last year, and IRS Free File if your adjusted gross income is $89,000 or below. Free tax filing for disabled veterans is easier once you know one foundational rule: VA disability compensation is not taxable, is not reported on your return, and does not count toward the income limits for any of these programs.1Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
What VA Benefits Are Tax-Free
Federal law excludes VA disability compensation from your gross income regardless of your rating. The VA does not send a 1099 for those payments, and you do not list them on your federal return.2VA News. Tax Season Guidance for Veterans The same treatment covers disability pensions and grants for adapted housing or vehicles.
IRS Publication 907 extends the exclusion to education and training allowances such as the GI Bill, survivor benefits, veterans’ insurance proceeds, and payments through the VA’s compensated work therapy program.3Internal Revenue Service. Publication 907 – Tax Highlights for Persons With Disabilities A stipend paid to a family member through the VA’s Program of Comprehensive Assistance for Family Caregivers is also excluded. Caregiver payments from other sources, such as Medicaid or private arrangements, may still be taxable.
Because none of these benefits count toward adjusted gross income, a veteran whose only income is VA disability compensation may not owe a return at all. Filing can still pay off if you qualify for a refundable credit like the Earned Income Tax Credit.
Which Free Filing Program Fits You
MilTax If You Recently Separated
MilTax is the strongest option for anyone within 365 days of a separation or retirement date, and it also covers active-duty members, families, and survivors. The software handles the situations that trip up generic tools: combat pay exclusions, the Military Spouses Residency Relief Act, and the multi-state returns that pile up after relocations. It files your federal return and up to five state returns at no charge and includes access to consultants who specialize in military finances.4Military OneSource. MilTax – Free Tax Filing Software and Support If you left the service less than a year ago, start here.
VITA If You Earn $69,000 or Less
The Volunteer Income Tax Assistance program pairs you with an IRS-certified volunteer who prepares and files your federal return in person, at no cost, if you earn $69,000 or less.5Internal Revenue Service. Free Tax Return Preparation for Qualifying Taxpayers Sites operate out of community centers, libraries, and military installations. You bring your documents, sit down with a trained preparer, and walk out with a completed return. Filers 60 and older can also use the Tax Counseling for the Elderly program, which works the same way with a focus on pension and retirement questions.6Internal Revenue Service. Tax Counseling for the Elderly
IRS Free File If Your AGI Is $89,000 or Below
IRS Free File is a partnership between the IRS and private tax software companies. If your adjusted gross income is $89,000 or less, you can use guided preparation software at no cost for your federal return.7Internal Revenue Service. 2026 Tax Filing Season Opens With Several Free Filing Options Available Some participating companies include a free state return; not all do.8Internal Revenue Service. E-file – Do Your Taxes for Free Above $89,000, you can still use Free File Fillable Forms, which are electronic versions of IRS paper forms with basic calculation support and no guided walk-through. IRS Direct File, the agency’s own tool, is not available for the 2026 filing season.
Documents to Have Ready
Pulling paperwork together before you sit down with software or a VITA volunteer saves real time.
- Social Security numbers for yourself, your spouse, and any dependent you plan to claim.
- W-2s from each employer and any 1099s covering interest, dividends, freelance work, or retirement distributions.
- Your VA benefit summary letter, available through VA.gov, which confirms your rating and helps separate tax-free VA income from taxable income when you calculate your AGI.9Veterans Affairs. Download VA Benefit Letters
- Last year’s return, since the prior-year AGI speeds up identity verification when you e-file.
- Bank routing and account numbers for direct deposit.
One point that confuses many veterans: the VA does not issue a 1099 for disability compensation because it isn’t reportable.2VA News. Tax Season Guidance for Veterans If you also receive military retired pay, the taxable portion arrives on a 1099-R from the Defense Finance and Accounting Service. Check that the 1099-R reflects any offset for VA disability, since DFAS adjusts the taxable amount when retired pay is partially replaced by tax-free VA compensation.
Tax Rules That Catch Veterans at Filing Time
CRSC Is Tax-Free, CRDP Is Not
Military retirees with service-connected disabilities often receive one of two forms of concurrent pay, and they are taxed very differently. Combat-Related Special Compensation is tax-free, like VA disability compensation. Concurrent Retirement and Disability Pay is taxable in the same way as regular retired pay.10Defense Finance and Accounting Service. Combat-Related Special Compensation and Concurrent Retirement and Disability Pay If you receive CRSC, confirm it is not showing up as taxable income on your return.
The Combat Pay Election for the EITC
The Earned Income Tax Credit is refundable, so it can produce a refund even when you owe no tax. It requires earned income, and VA disability pay and military disability pensions do not count as earned income for that purpose.11Internal Revenue Service. Disability and the Earned Income Tax Credit If you or your spouse received nontaxable combat zone pay, you can choose to include it as earned income when figuring the EITC. The IRS recommends running the numbers both ways to see which produces the larger refund.12Internal Revenue Service. Military and Clergy Rules for the Earned Income Tax Credit If both spouses served, each independently decides whether to include their combat pay. If you include any of your nontaxable combat pay, you must include all of it.
Total and Permanent Disability Student Loan Discharge
If you received a Total and Permanent Disability discharge of your federal student loans, you do not owe federal income tax on the forgiven balance. Discharges based on total and permanent disability are excluded from taxable income under current law.13Taxpayer Advocate Service. What to Know About Student Loan Forgiveness and Your Taxes
Combat Zone Deadline Extensions
If you served in a combat zone or a contingency operation, the IRS gives you extra time for almost every tax action, from filing to paying to claiming a refund. The extension runs for your entire period in the zone, plus 180 days after you leave, plus whatever time remained on the original deadline when you entered.14Office of the Law Revision Counsel. 26 USC 7508 – Time for Performing Certain Acts Postponed by Reason of Service in Combat Zone No interest or penalties accrue during that period.15Internal Revenue Service. Extension of Deadlines – Combat Zone Service Hospitalization outside the United States for combat zone injuries extends the clock through the full hospitalization plus 180 days; inside the United States, hospitalization extensions are capped at five years.
Combat pay itself is excluded from gross income for any month in which you spent even a single day in a designated combat zone. Enlisted members and warrant officers can exclude all compensation; commissioned officers can exclude up to the highest enlisted pay rate for the month.16Office of the Law Revision Counsel. 26 USC 112 – Certain Combat Zone Compensation of Members of the Armed Forces
After You File
Electronic filing is the fastest route, and each of the free programs above submits your return directly to the IRS. Acceptance or rejection typically reaches your e-file provider within 48 hours, and e-filed returns are usually processed within 21 days.17Internal Revenue Service. Processing Status for Tax Forms Paper returns take considerably longer.
The IRS “Where’s My Refund” tool tracks your refund online. You will need your Social Security number, filing status, and the exact refund amount from your return.
One warning worth knowing before you file: if you owe a delinquent debt to a federal agency, including the VA, the Treasury Offset Program can intercept part or all of your refund to satisfy that debt.18U.S. Department of Veterans Affairs. Chapter 18 – Treasury Offset Program, Treasury Cross-Servicing and Enforced Collection The VA must send a final notice at least 30 days before referring a debt for offset. If one shows up in your mail, resolve it before filing season so it doesn’t take your refund with it.
For anything a free filing program or a VITA volunteer can’t answer, IRS Publication 3, the Armed Forces’ Tax Guide, is updated each year and covers the full range of military-specific rules.19Internal Revenue Service. About Publication 3, Armed Forces Tax Guide