Tennessee Disabled Vets Face Staggering Tax Increases

Tennessee has altered a long-standing property tax relief program which benefits disabled veterans and the elderly. The changes mean that totally disabled veterans who are unable to find or keep gainful employment could see their tax bill double in 2015.

After Gov. Bill Haslam’s office determined that the tax relief program was unaffordable, the state passed the “Save the Tax Relief Act,” enacting changes but keeping some subsidies in place. It is hoped that the reforms will allow more than 140,000 Tennesseans to benefit from the $35 million in funding the state allocated for the program.

Still, the new law is bound to create hardship for some of the state’s most vulnerable citizens. The original program, launched in 1973, allowed surviving spouses, as well as elderly and totally disabled residents, to forego taxes on the first $25,000 of their home’s value. Totally disabled veterans would not be taxed on the first $175,000 on their home’s value.

Now the subsidy is limited to $100,000 for veterans and $23,000 for the elderly and disabled. New enrollees in the tax relief program will face income caps: totally disabled veterans must have an annual household income below $60,000, and the elderly must earn less than $28,690 per year. The Times Free Press estimates that a veteran with a $250,000 home in Chattanooga could get hit with a tax increase from $951 to $1,902.

As veterans benefits attorneys, we are greatly concerned that Tennessee has decided to place the burden for fixing its budget on the shoulders of its most vulnerable citizens, especially disabled veterans who have already given so much to this country. We know there are people of good will in state government and we hope they arrive at a more equitable solution.

If you are having trouble accessing VA benefits, Marcari, Russotto, Spencer & Balaban can help. We are a nationwide law firm focused on getting veterans the benefits to which they are entitled. To learn more, call us at 866-866-VETS or contact our office online.