Indiana 100 Percent Property Tax Deduction for Totally Disabled Veterans

This is Indiana's largest veteran benefit and it changed in March 2026. Most published descriptions still show the old one. What it is now. IC 6-1.1-12-14, as amended by House Enrolled Act 1210 of 2026 (Public Law 157-2026, approved March 12, 2026, effective January 1, 2026 retroactively), lets an individual deduct "one hundred percent (100%) of the assessed value" of the real property, or mobile or manufactured home, that the individual owns or is buying under a recorded contract "and uses as the individual's principal place of residence". The Department of Local Government Finance says it reduces the assessed value of the qualifying property to zero. A home that qualifies pays no property tax on the home itself, though charges that are not based on that assessed value still apply. Who qualifies. The individual must have served in the military or naval forces for at least ninety days, received an honorable discharge, have "a total disability" evidenced by a VA pension certificate or award of compensation or by an Indiana Department of Veterans Affairs certificate of eligibility, and have "resided in Indiana for at least one (1) year before the assessment date". Wartime service is not required. Total disability, not service-connected disability. The Department of Local Government Finance's June 2026 FAQ says section 14 "does not state that the veteran's total disability must be service-connected", which is why a VA pension certificate is accepted as evidence. The statute does not define total disability, and it does not mention individual unemployability; a veteran paid at the 100 percent rate through unemployability should file with the VA award letter that says so and have the county service officer complete the Department of Veterans Affairs certificate in Section VIII of the form. No value cap. Before 2026 the deduction was a flat $14,000, and nobody could take it if their Indiana property was assessed above $240,000 (the limit from the 2024 assessment date; it had been $200,000 from 2020 to 2023). House Enrolled Act 1210 removed the cap. The only remaining limit is IC 6-1.1-12-40.5: a mobile or manufactured home not assessed as real property cannot have more than half its assessed value deducted. What counts as the residence. The Department of Local Government Finance uses the homestead definition in IC 6-1.1-12-37 as a safe harbor: the dwelling, up to one acre of surrounding land and qualifying residential improvements. Land beyond an acre can qualify if it is used as part of the residence. The deduction can reach more than one parcel. Surviving spouses. The spouse of a veteran who met the service, discharge and disability tests at death keeps the deduction, whether or not the veteran owned the home, and loses it on remarriage. The spouse of a service member killed in action or who died on active duty or inactive duty training was covered by the old section 14 and is now covered only by the $250 credit in IC 6-1.1-51.3-5. What it rules out. Subsection (d): anyone receiving this deduction "may not receive a local property tax credit under IC 6-1.1-51.3", which means the $350 and $250 veteran credits and also the over-65 and blind or disabled credits. The Department says this applies even if tax remains on other property. A trust cannot take this deduction, although it can take the credits. The homestead donated to a veteran deduction in IC 6-1.1-12-14.5 cannot be taken for the same year. The transition trap for taxes due in 2027. IC 6-1.1-51.3-5(g) tells county auditors that, for taxes assessed in 2026 and payable in 2027, anyone who received the old section 14 deduction before House Enrolled Act 1210 is to be given the $250 credit instead. The Department of Local Government Finance FAQ says "a new filing is required to receive the amended 100% deduction for 2026 Pay 2027". A totally disabled veteran who was getting $14,000 must therefore file State Form 12662, revision 20 of June 2026, with the county auditor by January 15, 2027, or pay 2027 taxes with only a $250 credit. How to apply. File State Form 12662 with the auditor of the county where the property is. The statute requires it be completed, dated and filed by January 15 of the year the taxes are first due; a mailed form must be postmarked by then, and there is no retroactive filing. Attach the VA award letter or pension certificate and the DD-214, or have a county service officer or the Department of Veterans Affairs complete the Section VIII certificate. Once granted it carries forward while you remain eligible. What is out of date. The federal Army benefits library, re-read 2026-10-24, still describes a $14,000 deduction for a totally disabled veteran or a veteran aged 62 with 10 percent, capped at property assessed at $200,000. All three figures are gone.