Indiana Veteran Benefits Playbook
Turning Hoosier benefits into a family gameplan
From 0% to 100% P&T, this is about using VA and Indiana programs as a system your family can actually run.
What federal + Indiana benefits can really do
This guide is for all Indiana veterans and their families - whether you're sitting at 0%, 10-90%, 100% P&T, or are a surviving spouse or child. Your benefits are more than a disability percentage; used together, they become a family playbook.
Done right, your Indiana stack can:
- Provide tax-free income through VA disability compensation or DIC, or needs-based VA pension for some low- income wartime vets.
- Cover healthcare for you through VA health care, and in some situations healthcare for your family through CHAMPVA.
- Unlock college help for you and your kids through the Post-9/11 GI Bill, DEA stipends, and Indiana's Tuition and Fee Exemption (CVO) program for children of disabled or deceased veterans.
- Cut your property-tax bill as a disabled Hoosier veteran or surviving spouse.
- Stack Indiana's 529 tax credit with federal 529 rules so leftover college money can potentially feed a Roth IRA for your kid later.
- Add quality-of-life perks: plates, hunting/fishing, parks, and state veteran programs.
The goal here isn't memorizing statute numbers - it's seeing how federal and Indiana pieces connect, no matter where you are on the rating spectrum.
Federal benefits you can stack on top of Indiana
1. VA disability compensation or pension
If you have a service-connected rating, VA disability compensation is your tax-free baseline income. Amounts scale with rating and family status. If you don't have a rating yet, a good VSO can help you file.
- Compensation is federal tax-free and not taxed by Indiana.
- Certain severe conditions qualify for Special Monthly Compensation (SMC) on top of base rates.
- Some low-income wartime veterans with limited assets may qualify for VA pension instead of, or in addition to, a small rating - especially in older age or with Aid & Attendance.
2. VA health care for you
Enrolling in VA health care (for example through the Richard L. Roudebush VA Medical Center in Indianapolis or the network of Indiana VA clinics) gives you a backbone for your own medical and mental health care.
- The higher your rating, the lower your typical copays; many vets with significant ratings pay little or nothing for most care.
- Certain ratings unlock VA dental and additional services.
- Community Care and telehealth can help if you're far from a VA campus.
3. CHAMPVA for some spouses and kids
If you're 100% P&T, on certain types of Individual Unemployability, or your survivor receives DIC, your dependents may qualify for CHAMPVA - a federal health benefit that works like a civilian PPO with deductibles and cost-shares.
- Great when your spouse doesn't have strong employer coverage, or as a secondary payer behind that coverage.
- Kids can usually stay on CHAMPVA into their early 20s if they're in school (check current rules).
4. VADIP: dental for your family
CHAMPVA doesn't include routine dental, but CHAMPVA dependents and some veterans can buy into the VA Dental Insurance Program (VADIP) through private carriers.
- You pick a plan level; premiums come out monthly like any other dental plan.
- Works well when you use VA dental and want decent civilian dental for your spouse and kids.
5. GI Bill & DEA: federal education tools
Two main federal tools show up in most Indiana plans:
- Post-9/11 GI Bill - usually for the veteran, but some can transfer it to a spouse or child if conditions were met while on active duty.
- DEA (Chapter 35) - if you're 100% P&T or your survivor is on DIC, eligible dependents can get a monthly stipend while they're in school or training.
Even if you're not at 100%, combining GI Bill + Indiana CVO can be a powerful mix for you and your kids.
6. Federal “quality-of-life” perks
- VA home loan funding fee waiver for many vets with a service-connected rating - the higher the rating, the more likely the waiver.
- Commissary, Exchange, and MWR access for many disabled veterans and caregivers under current DoD access rules.
- Potential Space-A travel categories when permitted by current regulations.
How Indiana can stack on top of your VA benefits
1. Property-tax deductions for disabled veterans
Indiana offers multiple property-tax deductions that reduce the assessed value of your primary residence if you're a disabled veteran or eligible surviving spouse.
- Some deductions kick in at 10%+ service- connected, sometimes with age (62+) or home-value limits.
- Others are designed for veterans with 70%+ or 100% disabilities, or for vets whose disability arises from wartime service.
- Amounts are set in Indiana law and can change - think in terms of “thousands off your assessed value,” not a fixed number forever.
2. CVO: tuition & fee exemption for children
Indiana's Tuition and Fee Exemption (CVO) program is one of the biggest deals for Hoosier veteran families. For eligible children of veterans who served during a period of war and have a service-connected disability rating, CVO can cover up to 100% of tuition and regularly assessed fees at Indiana public colleges, up to a credit-hour cap.
- Works at IU, Purdue, Ball State, and other public institutions at the in-state rate. Some private non-profits get a separate, capped benefit.
- The veteran does not have to be 100% - the IDVA fact sheet says the veteran must have a “service-connected disability rating” from VA; that can be anywhere from 0% to 100%, as long as other conditions (wartime service, Indiana connection, etc.) are met.
- Children of veterans who died on active duty or from service-connected causes may also qualify, as can some dependents of NG/Reserve members deceased in the line of duty.
3. Indiana 529: CollegeChoice/Indiana529
Indiana's 529 plans are strong even if CVO wipes out most tuition:
- Indiana offers a state income-tax credit equal to a percentage of your annual contributions (for example, 20% of contributions up to a capped amount per year under recent law).
- Earnings grow tax-deferred and can be withdrawn tax-free for qualified education expenses - not just tuition, but also room and board (within limits), books, and required tech.
- Grandparents and other family members who are Indiana taxpayers can contribute and may qualify for their own state tax credit.
4. Plates, licenses & other perks
Indiana also offers “quality-of-life” benefits you can layer on:
- Military, veteran, and disabled-veteran plates, often with fee reductions and parking privileges when paired with appropriate documentation.
- Hunting, fishing, and state park perks for certain disabled veterans (and some other categories like former POWs or Purple Heart recipients).
- Access to programs like the Indiana Veterans' Home and the Military Family Relief Fund for qualifying situations.
Using VA, CHAMPVA (if eligible), and maybe an HSA
Indiana doesn't change federal health rules, but your geography and employer options do. The idea is to let VA care for you and, when available, CHAMPVA for your family, reduce the “unknown” side of medical bills so you can build longer-term tax advantages.
Sample setups by status
- Any rating (or no rating yet): You use VA health care as it fits, plus employer/marketplace coverage for your family. No CHAMPVA yet, but you can still explore an HSA if your coverage is a qualifying HDHP.
- Higher ratings but not 100%: Your VA copays may be lower or waived; you still use employer coverage for the family. HSA strategy is very similar.
- 100% P&T or DIC family: You rely heavily on VA; spouse/kids are on CHAMPVA (and maybe VADIP). If one of you also has access to an HDHP through work, you analyze whether an HSA is allowed and worth it.
Quick HSA recap
- Contributions (up to annual limits) are generally pre-tax or tax-deductible.
- Growth inside the account is tax-free.
- Qualified medical withdrawals are tax-free at any age; after 65 you can use HSA funds for non-medical expenses without penalty (but pay normal income tax).
Why HSAs pair well with strong federal coverage
- VA + CHAMPVA (when present) can keep large, unpredictable bills off your plate.
- That makes it realistic to max the HSA each year and invest most of it in long-term assets instead of draining it on small expenses.
- By your 60s and 70s, a well-funded HSA can cover Medicare premiums, long-term care insurance (up to IRS limits), dental, hearing aids, and other out-of-pocket health costs.
Indiana schools, CVO, DEA, and 529 planning
1. Start with what the school and state can waive
Before you panic about four years of sticker price, map the automatic discounts:
- CVO for your kids if you have any service-connected rating and meet Indiana's wartime/eligibility rules - often wiping out tuition and regularly assessed fees at public schools.
- Veteran-specific scholarships, Yellow Ribbon (for certain private schools when GI Bill is used), and in-state treatment for some recently separated vets.
- Need-based help (Pell, state grants) stacked on top of CVO or GI Bill.
2. Layer federal benefits on top
Depending on your status, your family might be able to combine:
- Post-9/11 GI Bill (for you, or transferred to a spouse/child if you set that up while in service).
- DEA stipends if you're 100% P&T or your survivor is on DIC - your child gets a monthly payment while they're in school, which pairs perfectly with CVO covering tuition.
- Work-study and part-time jobs so your kid can keep loans minimal while still having some spending money.
3. Using a 529 when tuition might be mostly covered
If CVO and federal aid are likely to cover most tuition, an Indiana 529 becomes a flexible, tax-advantaged tool for:
- Room and board within IRS limits, especially when living on campus or near a city campus like IUPUI.
- Required tech, tools, and licensing exams tied to the program.
- Trade or apprenticeship programs if your kid doesn't want a traditional four-year degree.
4. Leaving the door open for 529 → Roth IRA
Newer federal rules allow certain leftover 529 money to roll into a Roth IRA for your child, within limits:
- The 529 typically must have been open at least 15 years.
- Only older contributions (and their earnings) qualify; recent contributions are usually excluded.
- Each year's rollover counts toward the child's Roth contribution limit and requires them to have at least that much earned income.
- There's a lifetime cap on how much can be rolled from a 529 to a Roth for a given beneficiary.
5. A simple Indiana family timeline (any rating)
Younger years
You open an Indiana 529 for each kid and throw in what you can. If you're rated, you also bookmark the CVO fact sheet so you know what your kids will be eligible for later.
High school & early planning
You talk with the college's veterans office and financial aid. You clarify how CVO, GI Bill, DEA (if eligible), and scholarships will stack. Your kid applies with a real plan, not guesswork.
College & beyond
CVO and aid cover most of the bill. DEA (if your status allows) plus a part-time job cover living costs. You draw from the 529 strategically. If money remains years later and the rules line up, you explore slow 529 → Roth rollovers to jump-start your child's retirement savings.