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Don't overlook state tax breaks for military personnel

Today, despite the festive outings across the United States, is the most somber of national holidays.

Final resting place_US Army via photopin
Photo credit: The U.S. Army via photopin cc

What we now call Memorial Day began with a ceremony on May 5, 1866, in Waterloo, New York, where residents of that community honored local veterans who had fought in the Civil War.

Exactly two years later, the head of the Grand Army of the Republic, an organization of Union veterans, established the day as a special time for the nation to decorate the graves of Civil War dead with flowers.

The annual rite spread and soon was expanded to a way of honoring veterans of all wars who lost their lives. In 1971, Congress declared Memorial Day was declared a national holiday, moving the annual day of honoring veterans who have passed away to the last Monday in May.

While we remember those in uniform who gave so much and who have passed away, Memorial Day also is a time to think of the members of today's members of the military.

Tax breaks for active and retired military: There's no shortage of special federal tax treatment of military personnel.

But since most states also collect income tax, it's important for our soldiers, sailors and veterans to know how their states treat their earnings and retirement benefits. There also often are tax considerations at more local tax jurisdiction levels, such as property tax exemptions by counties for veterans.

As is the case with all taxes for military personnel and civilians at all levels, the laws are continually changing.

Iowa's new tax treatment of military members, retirees: As Memorial Day 2014 approached, for example, Iowa enacted a wide-ranging bill that exempts military veterans' federal retirement benefits from state income taxes; exempts military survivor benefits from Iowa income tax; and expands eligibility for the Military Homeownership Assistance Program's down payment and closing cost assistance.

Other provisions of the new Iowa law allow private employers to give veterans preferential treatment in hiring; direct the Hawkeye State's occupational licensing boards to adopt rules allowing credit for military training and experience in the licensing process; and make it easier for troops to earn academic credit for their military training and experience if they decide to seek a degree at an Iowa college or university.

Other states' military tax options: You can check with your state's tax department as to what benefits are available for active or retired members of the military. also tracks state income tax laws for military personnel, as does's compilation of state tax information.

I know that taxes are not at the top of anyone's to-do list today. But when your family celebrations and Memorial Day remembrances are done, take time to check out the federal and state tax benefits for military members.

The tax benefits could make a big difference to all the men and women who've made such a big difference in all our lives.

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