Why Michigan’s Disabled Veterans Leave Thousands in Benefits on the Table
Michigan offers disabled veterans a set of state programs that sit alongside federal VA benefits: a full property tax exemption on a qualifying homestead, a state income tax credit for property taxes paid, a disabled veteran registration plate, tuition support for the children of certain veterans, emergency grants, and preference in state civil service hiring. Each program is administered by a different office, under its own eligibility rules and its own application. This article describes how each one is defined in Michigan law and agency guidance, and where those rules changed recently.
Every figure, deadline and eligibility rule below is drawn from the Michigan Department of Treasury, the Michigan Veterans Affairs Agency, the Michigan Legislature, MI Student Aid, or VA.gov, and is linked to its source. Because several of these programs turn on a VA determination, this article also describes how a VA disability rating interacts with state eligibility.
How Michigan Programs Connect to VA Determinations
Michigan’s disabled veteran programs are administered by state and local offices, but several of them define eligibility by reference to VA determinations. Under MCL 211.7b, the property tax exemption turns entirely on a determination made by the U.S. Department of Veterans Affairs, and the State Tax Commission requires the VA’s own letter or certificate as the supporting document — a letter from a County Department of Veterans Affairs is expressly insufficient. Because each program has its own administering office and its own application, a VA rating on its own does not enroll a veteran in any of them.
The offices involved differ by program. The property tax exemption is handled by the city or township assessor, the tuition grant by MI Student Aid, emergency grants by Michigan Veterans Trust Fund county committees, and the registration plate by the Secretary of State under MCL 257.803f.
The Michigan Veterans Affairs Agency describes itself as the state’s central coordinating agency for veterans and their families, and it operates the Michigan Veteran Resource Service Center at 800-MICH-VET along with the Michigan Veteran Connector network and Veteran Service Officers. Per MyArmyBenefits, those Veterans Service Officers work with veterans and their families on applications for federal, state and local benefits free of charge. MVAA does not itself administer the property tax exemption, the tuition grant, or the registration plate — those sit with the local assessor, MI Student Aid, and the Secretary of State respectively.
Michigan’s Disabled Veterans Property Tax Exemption Under MCL 211.7b
Real property used and owned as a homestead by a qualifying disabled veteran is exempt from the collection of property taxes under Michigan’s General Property Tax Act, and the Michigan Department of Treasury describes the result as a 100% exemption of property taxes for a qualifying disabled veteran or unremarried surviving spouse.
Per MCL 211.7b, a “disabled veteran” is a Michigan resident veteran who meets one of three criteria: the VA has determined the veteran is permanently and totally disabled as a result of military service and entitled to veterans’ benefits at the 100% rate; the veteran holds a VA certificate showing receipt of pecuniary assistance due to disability for specially adapted housing; or the VA has rated the veteran individually unemployable. The State Tax Commission notes that either a Specially Adapted Housing (SAH) or a Special Housing Adaptation (SHA) grant satisfies the second criterion. The statute also requires that the property be used and owned as a homestead, with title held solely by the veteran or jointly with a spouse.
The statute extends the same exemption to an unremarried surviving spouse of a disabled veteran who was eligible immediately before death, and that continuation covers homestead property the surviving spouse acquires after the veteran’s death. Related federal survivor programs are described in more detail on REE Medical’s page on benefits for spouses and family dependents.
The exemption is administered by local assessing units, not by counties. According to State Tax Commission Bulletin 19 of 2023, Form 5107 goes to the local assessing unit in the city or township where the property is located and is not directed to the Department of Treasury or the State Tax Commission. Documentation requirements are set statewide on Form 5107: a VA letter showing permanent and total service-connected disability with entitlement at the 100% rate, a VA specially adapted housing certificate, or a VA letter showing individual unemployability. The Commission’s FAQ states that where a letter carries the VA’s logo and contains the necessary information, the exemption should be approved if the veteran meets one of the three criteria. A denial must be issued in writing on Form 6055 with the reason and appeal rights.
Under MCL 211.7b, the affidavit is due after January 1 and before December 31 of the calendar year for which the exemption is claimed, and the State Tax Commission’s FAQ states that a December 30 postmark is acceptable. Boards of review are not part of the application path: per Bulletin 19 of 2023, the Boards of Review have no authority to hear claims for the exemption in March, July or December — the local unit assessor grants or denies it.
The FAQ also addresses a rating that arrives partway through the year. Where a veteran receives a VA determination in August and Form 5107 with supporting documentation reaches the assessor before December 31, the assessor should grant the exemption for the entire year. Separately, under MCL 211.53b the July and December Boards of Review may correct enumerated qualified errors for the current and immediately preceding tax year, including a delay in the VA’s determination and an error by the local unit in processing a timely filed affidavit. Outside those corrections, the exemption applies from the tax year of the granted application forward, and prior-year taxes are generally not recoverable.
Michigan changed how this exemption continues. Public Acts 150, 151 and 152 of 2023 were approved on October 19, 2023 and, among other changes, allow the assessor rather than the Board of Review to grant or deny an application and provide for continuation without annual filing beginning January 1, 2025. Per MCL 211.7c, an exemption granted as to taxes levied on or after January 1, 2025 remains in effect without annual reapplication until it is rescinded by the recipient or denied by the assessor. The State Tax Commission notes that Form 6054 is used to rescind and is due within 45 days if the property is no longer used and owned as a homestead or the qualifications are no longer met. MVAA’s own benefits page still describes the exemption as an annual filing; the Treasury and statutory materials reflect the current rule.
MCL 211.7b also sets out how the exemption is prorated when the qualifying individual does not use and own the property as a homestead for the full tax year. Proration is based on the closing or other purchase documents, or, where those are not provided, on the year’s total property taxes divided by 365 and multiplied by the number of days of qualifying ownership and homestead use. Form 5107 notes that for a newly purchased home, closing documents are required or the current-year exemption will be prorated by days.
MCL 211.7b provides that upon granting the exemption, each local taxing unit bears the loss of its portion of the taxes exempted. The State Tax Commission publishes its exemption guidance centrally, including a notice titled Disabled Veterans Reminded to Contact Local Municipality, and Treasury maintains a disabled veteran exemption program page listing Forms 5107, 6054 and 6055.
Pending legislation, not current law: House Bills 4443 and 4444 of 2025 would layer a new “disabled veteran’s homestead specific tax” with discounts scaled to VA disability severity onto the MCL 211.7b exemption, and the introduced text of HB 4444 remains referred to the House Committee on Government Operations with no public act number.
VA Ratings and State Benefits Do Not Automatically Connect
A VA determination of total and permanent disability also affects vehicle registration. Per MVAA, a veteran the VA has determined to have a total and permanent disability rating may register one passenger vehicle with a disabled veteran plate at no registration fee and a one-time $5 administrative fee when the plate is first issued. Under MCL 257.803f, the plate issued to a totally disabled veteran is exempt from the registration tax and the service fee, a separate plate is available to veterans with a service-connected rating of not less than 50%, and a surviving spouse of a veteran with a rating of not less than 50% may use and renew the plate after the veteran’s death.
The Children of Veterans Tuition Grant does not apply an income test. Per MI Student Aid, eligibility rests on the veteran having death, total and permanent service-connected disability, or missing-in-action status, together with student conditions that include being the natural or adopted child of a qualifying Michigan veteran, being older than 16 and under 26, 12 months of Michigan residency, a current-year FAFSA, at least half-time undergraduate enrollment at a participating institution, and a cumulative GPA of at least 2.25. Michigan Veterans Trust Fund eligibility is stated in terms of Michigan residency and qualifying wartime service, with documentation that includes proof of employment or other income.
A VA rating establishes disability status for VA purposes. It does not by itself establish eligibility for a Michigan education grant or an emergency grant. Each program has its own application, its own documentation and its own criteria.
Per the VA, Individual Unemployability may be available where a service-connected disability prevents substantially gainful employment and the veteran has either one disability rated at 60% or more, or a combined rating of 70% or more with one at 40% or more. The VA states that the disability rating itself stays the same and that Individual Unemployability may provide compensation at the same level as a 100% rating. Under MCL 211.7b, a veteran the VA has rated individually unemployable meets one of the three criteria for the Michigan exemption regardless of the combined percentage. REE Medical describes the broader significance of a 100% VA disability rating separately.
Surviving Spouses and Aid and Attendance
According to the VA, Aid and Attendance is a monthly amount added to the amount of a monthly VA pension rather than a standalone benefit, so a survivor’s claim begins with eligibility for the Survivors Pension. The VA states that a surviving spouse may be eligible for the Survivors Pension if they have not remarried, the veteran’s discharge was not dishonorable, and the veteran’s service meets one of the stated wartime tests — for example, at least 90 days with one day during a covered wartime period for service entered on or before September 7, 1980 — with yearly family income and net worth within limits set by Congress. The Survivors Pension is not conditioned on the veteran having held a disability rating or having received Aid and Attendance during their lifetime.
For the Aid and Attendance amount itself, the VA lists at least one of four conditions: needing another person to help perform daily activities such as bathing, feeding and dressing; having to stay in bed or spend a large part of the day in bed because of illness; being a nursing home patient due to loss of mental or physical abilities related to a disability; or eyesight limited to 5/200 or less in both eyes, or concentric contraction of the visual field to 5 degrees or less. There is no two-activity requirement.
The VA pays the difference between income for VA purposes and the applicable Maximum Annual Pension Rate. For December 1, 2025 through November 30, 2026, the VA lists a survivor MAPR with Aid and Attendance of $18,697 with no dependents and $22,304 with one dependent child, alongside a net worth limit of $163,699. The VA also states that for medical expenses, only the amount above 5% of the MAPR may be deducted — $584 for a surviving spouse with no dependent child and $765 with one dependent.
On timing, the VA notes that an intent to file form can avoid a later effective date and may allow retroactive payments.
Employment Preferences in Michigan Law
Michigan’s civil service hiring system awards preference points to disabled veterans. Per MyArmyBenefits, where a numerical score or written examination is used, 5 points are added for a veteran or surviving spouse and 10 points for a disabled veteran. Per MVAA, an eligible veteran for state civil service preference is a person with 90 or more days of active-duty service and an honorable discharge, and preference is applied for online through the same site used to apply for state jobs.
The preference is not limited to scored examinations. Per MyArmyBenefits, where an examination score is not used, 5% or 10% of the highest possible score is added to the screening score, and where a mechanical or random screening process is used, applicants eligible for preference must be retained and placed in the final candidate pool. MVAA notes that preference now applies to promotional postings and that multiple forms of preference may be used for a single posting.
Michigan law does not require private employers to interview veteran applicants. The Private Employer’s Veterans’ Preference Policy Act, 2016 PA 207, authorizes a private employer to adopt a voluntary policy giving preference to a veteran over another equally qualified applicant or employee in hiring, promotion or retention; the act was approved June 21, 2016 and took effect September 20, 2016. It contains no interview mandate and no state-contract provision. In public employment, Act 205 of 1897 provides that a veteran shall be preferred for appointment and employment in state, county and municipal public departments, treats military experience as relevant professional experience when wages or salary are set, and sets removal protections with 15 days’ written notice, a written protest within 30 days, and a hearing. MVAA separately runs a Veteran-Friendly Employer Program that certifies employers at gold, silver and bronze levels — a recognition program rather than a mandate.
Retroactive Claims and What Can Actually Be Recovered
According to the VA, when it decides to pay a disability benefit it assigns an effective date, which is the day benefits can start. For a disability caused or made worse by military service, the VA states the effective date is whichever comes later — the date the VA receives the claim, or the date the veteran first got the illness or injury. Where the VA receives the claim within one year of the day the veteran left active service, the effective date can be as early as the day following separation. For a reopened claim, the VA states the effective date is the later of the date it receives the claim to reopen or the date the illness or injury began.
The same effective-date rules apply to secondary conditions as to other claims: the effective date is the later of the claim date or the date entitlement arose. REE Medical describes how documentation figures into a VA disability rating increase request in more detail.
Michigan’s property tax exemption does not follow the federal effective-date model. Under MCL 211.7b the exemption applies from the tax year of the application that the local assessor grants, subject to the proration rules and the limited MCL 211.53b qualified-error corrections described above. A change in VA rating does not by itself change a Michigan property tax bill.
The Service Record Problem
The National Archives records that a fire on July 12, 1973 at the National Personnel Records Center in St. Louis destroyed approximately 16 to 18 million Official Military Personnel Files, with no duplicate, microfilm or index copies in existence. The Archives states the losses were concentrated in Army personnel discharged November 1, 1912 to January 1, 1960, about 80% lost, and Air Force personnel discharged September 25, 1947 to January 1, 1964 with names alphabetically after Hubbard, James E., about 75% lost.
The National Archives also describes the reconstruction work that followed. It recovered approximately 6.5 million burned and water-damaged records, established a “B” (Burned File) registry to index them and an “R” (Reconstructed File) registry in April 1974, and collected Auxiliary Records used to reconstruct basic service information. The alternate sources it lists include Auxiliary Records such as Veterans Administration claims files, individual state records, Multiple Name Pay Vouchers, Selective Service registration records, Government Accounting Office pay records, military hospital medical records, entrance and separation X-rays, and organizational records.
Where the record is thin, objective clinical documentation gives the VA a clearer picture of a current condition. REE Medical coordinates independent medical evaluations and Disability Benefits Questionnaires completed by licensed providers using VA-standardized forms, and describes the role of medical evidence in VA disability claims separately.
Other Michigan Benefits for Disabled Veterans
Separate from the MCL 211.7b exemption, Michigan offers a Homestead Property Tax Credit Claim for Veterans and Blind People on Form MI-1040CR-2. Per the Treasury booklet, the credit is computed from a taxable value allowance divided by the home’s taxable value, capped at 100%, applied to eligible property taxes levied, with a maximum credit generally $1,900; the booklet’s worked example for a veteran with a 90% rating produces a $225 credit, and the 2025 claim was due April 15, 2026. MVAA also lists this income tax credit for property taxes paid among benefits for veterans rated 100% disabled.
Per the Michigan Department of Treasury, military retirement benefits are exempt from Michigan individual income tax, deducted on Schedule 1 and reported on Schedule W. MyArmyBenefits adds that active-duty pay, military disability retirement pay, and Survivor Benefit Plan annuities are also exempt from Michigan individual income tax.
Treasury’s property tax page for veterans and military personnel describes two further provisions: taxpayers meeting certain criteria may defer summer property taxes until February 14, and service members may qualify to retain the Principal Residence Exemption while on active duty using Form 2700.
Michigan Veteran Homes operates three communities — Chesterfield Township, Grand Rapids, and D.J. Jacobetti — offering long-term care, short-term care, rehabilitation and therapy, dementia and memory care, and palliative care.
The Children of Veterans Tuition Grant is limited to whichever comes first: 8 semesters, a total of up to $11,200, or reaching age 26, with a 2026–27 application deadline of June 30, 2027.
The Michigan Veterans Trust Fund provides emergency grants to Michigan veterans and dependent family members facing short-term financial crisis. Eligibility rests on Michigan residency and an honorable discharge plus 180 days of wartime service (90 for World War I), 180 days of active duty with an Armed Forces or Navy-Marine Corps Expeditionary Medal, or fewer than 180 days where discharge was due to a service-incurred disability. Applications run through county committees, and MVAA lists county Soldier and Sailor Relief Funds as a separate source of support with emergency and burial expenses.
MVAA lists VA health care Priority Group 1 with no co-payments first among benefits for veterans rated 100% disabled, covering services that include dental, vision, hearing aids, prosthetics, nursing home placement and medically related travel.
What Michigan’s Programs Have in Common
Michigan’s disabled veteran programs share one structural feature: each is defined by its own statute or agency rule, administered by its own office, and documented on its own form. The property tax exemption runs through the city or township assessor on Form 5107. The Homestead Property Tax Credit for Veterans and Blind People runs through the Michigan Department of Treasury on MI-1040CR-2. The Children of Veterans Tuition Grant runs through MI Student Aid. Emergency grants run through Michigan Veterans Trust Fund county committees. The disabled veteran registration plate runs through the Secretary of State under MCL 257.803f.
Several of the Michigan benefits described above turn on a VA determination, and the VA’s evaluation rests on the medical documentation in the record. REE Medical coordinates independent medical evaluations and Disability Benefits Questionnaires completed by licensed healthcare professionals using VA-standardized forms. REE Medical does not prepare, present, or submit VA disability claims and does not provide legal or representational services under 38 U.S.C. § 5901 or 38 U.S.C. § 5904.
Michigan veterans and family members can read more about how medical evidence functions in the VA’s evaluation on REE Medical’s overview of medical evidence in VA disability claims, or about the complimentary, informational consultation REE Medical offers.
DISCLAIMER: REE Medical, LLC is not a Veterans Service Organization (VSO) or a law firm and is not affiliated with the U.S. Veterans Administration (“VA”). Results are not guaranteed, and REE Medical, LLC makes no promises. REE Medical’s staff does not provide medical advice or legal advice, and REE Medical is not a law firm. Any information discussed, such as, but not limited to, the likely chance of an increase or service connection, estimated benefit amounts, and potential new ratings, is solely based on past client generalizations and not specific to any one patient. The doctor has the right to reject and/or refuse to complete a Veteran’s Disability Benefit Questionnaire if they feel the Veteran is not being truthful. The Veteran’s Administration is the only agency that can make a determination regarding whether or not a Veteran will receive an increase in their service-connected disabilities or make a decision on whether or not a disability will be considered service-connected. This business is not sponsored by, or affiliated with, the United States Department of Veterans Affairs, any State Department of Military and Veterans Affairs, or any other federally chartered veterans service organization.
