Vermont / State / 2025-2026 Session
2025 Act 71 Full military retirement exclusion, taken alongside Social Security, and a new $250 refundable veteran tax credit
Rewrote 32 V.S.A. 5830e(d) so that all federally taxable military retirement and survivor benefit income is excluded at a federal AGI of $125,000 or less for any filing status, phasing out at $175,000. The struck language had routed military retirement through the Civil Service Retirement System treatment, capping it at $10,000 and forcing an election against the Social Security exclusion; subsection (e)(2) now lets a taxpayer take the military exclusion in addition. Section 5 added 32 V.S.A. 5830g, a $250 refundable credit for a resident who has a discharge record verifying service in the uniformed services, at an AGI of $25,000 or less. The Office of Veterans Affairs tax page still tells veterans they must choose between Social Security and military retirement, and does not mention the credit at all.
Progress
Path to law: Bill in a two-chamber legislature
- Introduced Done, Senate
- In committee Done, Senate Finance, then House Ways and Means
- Passed one chamber Done, Senate
- Passed both chambers Done, Senate adopted the committee of conference report
- Signed by the governor Done,
- In effect Done,
Sponsors
- Ruth Hardy
- Alison Clarkson
- Martine Larocque Gulick
- Wendy Harrison
- Joseph "Joe" Major
- Robert Norris
- Tanya Vyhovsky
- David Weeks
- Rebecca "Becca" White
What it touches
- 32 V.S.A. § 5830e
- 32 V.S.A. § 5830g
- 32 V.S.A. § 5813(aa)
Catalog entries (2)