Benefits in my Backyard: Alabama

All military retirement pay is tax-exempt.

Jonathan Kaupanger
April 20, 2018 - 12:54 pm
Welcome to Sweet Home Alabama Road Sign along Interstate 10 in Robertsdale, Alabama USA, near the State Border with Florida.

Alabama is known as the heart of Dixie, and it might be for you, if you're an entrepreneur. It has the second highest number of veteran-owned businesses of any state, according to WalletHub.  It also ranks No. 1 for Economic Environment.


  • All military retirement pay is tax exempt.
  • Disabled Alabama residents may be exempt from property taxes on their home and up to 160 acres of land if they are over 65 years old and have a net annual income of $12,000 or less. 
  • Vets who’ve used the VA’s Specially Adapted Housing Grant to purchase a house, as long as the owner also occupies the place, no taxes are paid.
  • No taxes on vehicles bought by disabled vets using the VA’s motor vehicle grant.


  • Purple Heart recipients can get free education at Alabama two-year or four-year technical colleges, community colleges or junior colleges. Check with the school to confirm they participate in the program first.   
  • GI Dependents Scholarship Program waives up to $250 for each semester hour and up to $1k for books at the same types of schools.
  • Service-connected disability allows for educational benefits for family members as well. Details on the Alabama Department of Veterans Affairs website.


  • Interested in working for the state government?  An honorable discharge from service gives you an extra five points added to any state employment exam.  If you have a service-connected disability, you get another 10 points.  Spouses of some disabled or deceased vets get 10 points added for their examinations as well.  Vets also get preference over non-vets with the same ratings on classified service employment registers.


  • Veterans of war with 25% disability (service related or not) are eligible for exemption from business or occupational licensing taxes.
  • Career counseling: Alabama Career Center  provides career counseling, resume assistance, direct job placement, classroom and on-the-job training and information about local and national labor markets and unemployment compensation.

Veterans Homes

  • There are four state run veterans’ homes in Alabama.  Requirements include an honorable discharge and  a least one day of wartime service to qualify to live there. There is a monthly fee as well.


Links and Resources: