Financial Benefits for Veterans in Illinois
2 Financial benefits for veterans in Illinois.
State Income Tax Exemption on Military Pay & Retirement
Illinois does not tax active-duty military pay or military retirement and disability retirement pay under the state's flat individual income tax.
Eligibility: Illinois residents with military pay or military retirement/disability retirement income included in federal adjusted gross income.
Estimated value: Full exemption from Illinois' 4.95% income tax on qualifying military pay and pensions
How to apply: Subtract qualifying military pay on Schedule M when filing Form IL-1040 (see Illinois Department of Revenue Publication 102).
War Participation Bonus & POW Compensation
One-time cash bonuses for Illinois veterans of qualifying conflicts, monthly compensation for former POWs, and survivor payments for certain service-connected deaths.
Eligibility: Illinois residents at the time of (or 12 months prior to) entering service who received an honorable discharge and qualifying campaign service. Former POWs and survivors of certain service-connected deaths may also qualify.
Estimated value: One-time bonuses (e.g., $100 for Korea, Vietnam, Persian Gulf, or GWOT service), $50/month POW compensation, and $1,000 survivor benefits in qualifying cases
How to apply: Submit the War Bonus Application to the Illinois Department of Veterans' Affairs; a Veteran Service Officer can assist.