The law took effect earlier this month, according to a Department of Veterans Affairs news release.
"The military salute is a unique gesture of respect that marks those who have served in our nation's armed forces," Veterans Affairs Secretary Dr. James B. Peake said. "This provision allows the application of that honor in all events involving our nation's flag."
The provision builds on a change that went into effect last year. That change authorized veterans and military personnel not in uniform to render the military-style hand salute during the raising, lowering or passing of the flag.
Traditionally, veterans' service organizations rendered the hand-salute during the national anthem and at events involving the national flag while wearing their organization's headgear. Otherwise, as with all other Americans, the etiquette is to place the right hand over the heart.
The most recent change was part of the 2009 Defense Authorization Act, which President Bush signed Oct. 14.
U.S. Sen. Jim Inhofe of Oklahoma, an Army veteran, sponsored both pieces of legislation.
"The salute is a form of honor and respect, representing pride in one's military service," Inhofe said in a written statement. "Veterans and servicemembers continue representing the military services even when not in uniform. The U.S. Code is now consistent for veterans and all service members in regards to the symbolic gesture of the military salute."