Montana Disabled Veterans Property Tax Exemption: How to Apply

Montana’s disabled veterans property tax exemption, formally the Montana Disabled Veteran (MDV) Assistance Program, cuts the property tax rate on a qualifying veteran’s primary residence by 50% to 100%, with the size of the cut tied to income and filing status. It is available to veterans the VA rates at 100% service-connected disabled, and in some cases to their unmarried surviving spouses. Because the income brackets adjust each year for inflation, the actual savings shift from year to year.

Who Qualifies

Three things have to line up: your service, your disability status, and your home.

You need an honorable discharge from active duty in the U.S. armed forces. A general discharge under honorable conditions does not count. The U.S. Department of Veterans Affairs must currently rate you at 100% disabled for a service-connected condition, or pay you at the 100% rate.¹ Veterans with significant disabilities rated below 100% do not qualify. That is the single biggest reason applications get denied.

The property has to be your primary residence, and you must own and occupy it. Second homes, rentals, and investment property are not eligible.² You also need to be a Montana resident. Income is measured using your federal adjusted gross income (FAGI) from two years before the tax year, so a 2026 application looks at 2024 FAGI.

How Much You Save

The program does not lower your home’s assessed value. It reduces the tax rate applied to it. The reduction runs from 50% to 100%, and lower income means a larger reduction. Cross the top income threshold for your filing status and you get nothing that year.

For tax year 2025, the Montana Department of Revenue published these brackets.¹

Single Filers

$0 to $48,152: 100% reduction (no property tax owed)
$48,153 to $52,968: 80% reduction
$52,969 to $57,781: 70% reduction
$57,782 to $62,598: 50% reduction

Married Filers or Heads of Household

$0 to $57,781: 100% reduction
$57,782 to $62,598: 80% reduction
$62,599 to $67,412: 70% reduction
$67,413 to $72,229: 50% reduction

For tax year 2026, the Department has confirmed the same maximum income caps: $62,598 for single filers and $72,229 for married filers or heads of household. A dollar over those ceilings and the program provides no benefit for that year.¹

A quick example. A married veteran with $55,000 in FAGI sits in the 100% bracket. If the home would normally carry $2,400 in annual property tax, they owe nothing. At $65,000 in income, the same veteran drops to a 70% reduction and would owe about $720.

Surviving Spouse Rules

An unmarried surviving spouse of a qualifying veteran can receive the same rate reduction, but at lower income thresholds. For tax year 2025:¹

$0 to $40,127: 100% reduction
$40,128 to $44,942: 80% reduction
$44,943 to $49,758: 70% reduction
$49,759 to $54,573: 50% reduction

To qualify, the surviving spouse must own and live in the home, remain unmarried, and produce a VA letter confirming one of the following: the veteran was rated or paid at 100% service-connected disabled at the time of death, the veteran died while on active duty, or the veteran died from a service-connected disability.² Remarriage permanently ends eligibility. There is no reinstatement if a later marriage ends in divorce or widowhood.

How and When to Apply

Applications go to the Montana Department of Revenue, not the county assessor. You can file online through the Department’s system or submit a paper MDV form to your local Department of Revenue field office. The deadline is April 15 of the tax year you are applying for. Miss it and your application rolls to the following year.¹

The essential document is a VA letter confirming your current 100% service-connected disability rating. A DD-214 is not required. If you did not file a Montana income tax return for the relevant prior year (2024 for a 2026 application), you also need income documentation, such as a copy of your federal return if you recently moved to Montana, or Social Security and veterans’ benefit statements if those are your only income sources.³

The exemption is not permanent. You must reapply every year with updated income information, because a change in income can shift you into a different tier or above the cap entirely.²

If Your Application Is Denied

Montana has a formal appeal process with several levels. Start by filing a written objection with the Department of Revenue within 20 days of the notice, explaining why you disagree and attaching supporting documents. A department supervisor reviews the case and issues a written determination within 45 days.⁴

If that informal review does not go your way, you can escalate to the Department’s Office of Dispute Resolution within 15 days of the informal determination. An administrative law judge will hear the case and issue a decision.⁴ From there you can appeal to the Montana Tax Appeal Board, which holds hearings in Helena and can review the record or hear new testimony. The final step is a district court appeal.⁵ Most disputes end at the informal review, but the full path is there if the money justifies it.

Effect on Your Federal Return

A smaller property tax bill also means a smaller deduction on your federal return, if you itemize. The state and local tax (SALT) deduction on Schedule A only covers property taxes you actually pay, so any amount eliminated by the MDV program cannot also be deducted federally. For 2026, the SALT deduction is capped at $40,400 for most filers and $20,200 if married filing separately.⁶ Most veterans in the MDV income brackets sit well below that cap, and the state tax savings far exceeds the lost federal deduction.

1
Montana Department of Revenue. Montana Disabled Veteran Assistance Program (MDV)
2
Montana State Legislature. Montana Code 15-6-311 – Disabled Veteran Program
3
Montana Department of Revenue. Montana Disabled Veteran Property Tax Relief Application for Tax Year 2026 Form MDV
4
Montana Department of Revenue. How to Appeal a Department Tax Decision
5
Montana Tax Appeal Board. Appeal Process
6
Internal Revenue Service. Publication 530, Tax Information for Homeowners