Hawaii is home to more than 114,000 veterans — a community shaped by the Pacific theater of World War II, the Korean War, and decades of active-duty presence at Joint Base Pearl Harbor-Hickam, Schofield Barracks, and Marine Corps Base Hawaii. In a state with one of the highest costs of living in the nation, Hawaii's veteran benefits — from property tax exemptions to free university tuition — provide meaningful financial relief. Here's the complete 2025 guide.
Hawaii occupies a singular place in American military history. The December 7, 1941 attack on Pearl Harbor drew the United States into World War II, and Hawaii has remained one of the most strategically important military locations in the Pacific ever since. Today, the state is home to major installations that continue to define its military identity:
Hawaii's 114,000+ veterans include a disproportionate number of WWII and Korean War veterans — many of whom served in the Pacific theater. The state's veteran community is also notably diverse, with significant Japanese American veteran representation (including many 442nd Regimental Combat Team veterans), Filipino American veterans, and veterans from across the Pacific island community.
Hawaii imposes a state income tax with rates ranging from 1.4% to 11% — one of the highest top rates in the nation. However, Hawaii provides a significant carve-out for the military community: military retirement pay is excluded from Hawaii state income tax.
This exemption means that a veteran receiving $24,000 per year in military retirement — roughly a 20-year E-7 retirement — saves approximately $2,200 to $2,600 annually in Hawaii state income taxes compared to if the income were fully taxable at Hawaii rates. For higher-ranking retirees with larger retirement checks, the annual savings are proportionally greater.
Key points about Hawaii's military retirement tax treatment:
In Hawaii's high cost-of-living environment, this tax exemption can meaningfully improve the financial viability of retirement on a fixed military pension. Veterans should confirm their specific situation with the Hawaii Department of Taxation (tax.hawaii.gov).
Editorial Standards: This article was written by Marcus J. Webb, a veterans benefits researcher who has studied 38 CFR Part 4, the VA M21-1 Adjudication Manual, and thousands of BVA decisions. Content is verified against current 38 CFR regulations and VA.gov guidance. Last reviewed: April 2026. Not legal advice — for representation on your specific claim, talk to a VA-accredited attorney.
Hawaii law provides veterans with a meaningful advantage in state government hiring through the Hawaii Veterans Preference under Hawaii Revised Statutes § 78-1.
Veterans who served on active duty and were honorably discharged receive 5 preference points added to their civil service examination scores. Veterans with service-connected disabilities receive 10 preference points. These additions can make a significant difference in competitive state hiring, particularly for positions where civil service exam scores determine hiring order.
Surviving spouses of veterans who died in service or from service-connected causes may also qualify for preference points. Contact the Hawaii Department of Human Resources Development for current procedures and qualifying criteria.
Hawaii participates in the federal HIREVets program and maintains state-level veteran employment initiatives through the Hawaii Department of Labor and Industrial Relations. Services include job placement assistance, resume development, career counseling, and connections to employer partners who prioritize veteran hiring. Veterans are designated as priority service customers at Hawaii American Job Centers.
Hawaii consistently ranks as the most expensive state in the nation for cost of living. Housing costs in Honolulu are among the highest in the country, groceries and utilities carry significant premium over mainland prices, and transportation costs are elevated by the state's island geography. A median home in Honolulu regularly exceeds $800,000.
This economic reality makes Hawaii's veteran benefits — particularly the property tax exemption and military retirement tax exclusion — disproportionately valuable compared to states with lower costs of living:
Veterans considering Hawaii as a retirement destination should carefully model the interplay of VA compensation, military retirement (tax-free at state level), Social Security, and property tax savings against Hawaii's cost of living. For veterans with high VA ratings and military retirement, the combination can be financially viable — especially if VA healthcare covers most medical expenses through the VA Pacific Islands Healthcare System.
Hawaii's veteran community includes a substantial population of WWII and Korean War veterans — many of whom served in the Pacific theater or whose family members served. The state maintains special recognition and support programs reflecting this history:
The 442nd Regimental Combat Team — composed predominantly of Japanese American volunteers, many from Hawaii — is the most decorated unit in U.S. military history. Hawaii maintains deep institutional respect for this legacy, and surviving veterans and their families are recognized through state ceremonies and historical preservation programs. Organizations such as the 100th Infantry Battalion Veterans, Go For Broke National Education Center, and state historical societies serve this community.
Hawaii's proximity to the Asia-Pacific region means its veteran community includes veterans from Pacific Island nations — including veterans from the Compact of Free Association states (Federated States of Micronesia, Republic of the Marshall Islands, Palau) who served in the U.S. Armed Forces. These veterans may access some state programs; eligibility varies by specific benefit. OVS can provide guidance on accessing benefits for non-citizen veterans who served honorably.
Hawaii offers reduced hunting and fishing license fees for veterans with qualifying service-connected disabilities. Contact the Hawaii Division of Forestry and Wildlife for current rates.
The VA Pacific Islands Health Care System serves Hawaii veterans with facilities in Honolulu and community-based outpatient clinics on neighbor islands. Telehealth available for inter-island access.
Hawaii veterans receive VA healthcare through the VA Pacific Islands Health Care System, headquartered in Honolulu with community-based outpatient clinics on Maui, the Big Island, and Kauai. Veterans on neighbor islands can access many services through telehealth (VA Video Connect) without traveling to Oahu. Veterans with specialized care needs may need to travel to the Honolulu main facility or receive community care referrals for services not available locally.
Veterans living on Maui, the Big Island, Kauai, or Molokai face geographic access challenges somewhat analogous to rural Alaska — the nearest full VA medical center is on Oahu. The VA has expanded telehealth and community care options specifically to address neighbor island access. Veterans on neighbor islands should proactively enroll in the VA system, establish telehealth access, and request community care referrals for services that require in-person visits.
No. VA disability compensation is exempt from federal income tax and is also excluded from Hawaii state income tax. You will not owe Hawaii state income taxes on VA compensation at any rating level.
The $100,000 Honolulu County exemption is specifically for veterans who are "totally disabled" — which the county generally interprets as 100% permanent and total (P&T) service-connected disability. Veterans with lower ratings may qualify for a lesser exemption; contact the Honolulu Real Property Assessment Division for current criteria. Remember that the September 30 deadline is firm.
Yes. All University of Hawaii campuses are approved for GI Bill benefits (Post-9/11 and MGIB). Veterans qualify for immediate in-state tuition rates, maximizing the value of their GI Bill benefit. UH campus veterans services offices assist with enrollment certification and benefit processing.
The National Memorial Cemetery of the Pacific (Punchbowl) in Honolulu is a federal veterans cemetery providing free burial for eligible veterans and their dependents. Contact the National Cemetery Scheduling Office at 1-800-535-1117. Eligibility includes honorably discharged veterans who meet service requirements. The cemetery is managed by the VA National Cemetery Administration.
The Hawaii OVS is headquartered in Honolulu (459 Patterson Road, Fort Shafter Flats, Honolulu, HI 96819) and maintains representatives statewide. Visit ovs.hawaii.gov or call for current office hours and contact information. Services are free of charge for all Hawaii veterans.
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