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State Benefit·Vermont·🏛️Tax Benefits

Military Retirement Income Tax Exemption (Act 71)

Full exemption of military retirement pay and survivor benefit income from Vermont state income tax for AGI up to $125,000.

Verified May 12, 2026againsttax.vermont.gov

At a glance

Benefit type
Tax Benefits — Vermont
Who it's for
Veterans, Survivors
VA rating needed
No rating requirement
Estimated value
Up to 8.75% savings on retirement pay
Where it applies
Vermont
Last verified
May 12, 2026

What is Military Retirement Income Tax Exemption (Act 71)?

Military Retirement Income Tax Exemption (Act 71) is a Vermont tax benefits benefit for veterans, survivors. Full exemption of military retirement pay and survivor benefit income from Vermont state income tax for AGI up to $125,000. The listed value is Up to 8.75% savings on retirement pay.

Who qualifies

VeteransSurvivors
  • Available to any veteran
  • Vermont residency

How to apply

Apply through the official Vermont agency.

Open application

Who is eligible

Eligibility

Any filing status. Full exemption if AGI is $125,000 or less. Partial (phased-out) exemption for AGI between $125,000 and $175,000. No exemption above $175,000 AGI. Effective for tax year 2025.

How to apply for Military Retirement Income Tax Exemption (Act 71)

How to apply

Claimed when filing Vermont state income tax return.

Open applicationVerify at official source

Verified information & sources

Last verified: May 12, 2026

Official source: tax.vermont.gov

Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.

Frequently asked questions about Military Retirement Income Tax Exemption (Act 71)

Who qualifies for Military Retirement Income Tax Exemption (Act 71)?▾
Military Retirement Income Tax Exemption (Act 71) is for Veterans, Survivors; available to any veteran; vermont residency. See the eligibility details on this page and confirm with the official source before applying.
How much is Military Retirement Income Tax Exemption (Act 71) worth?▾
The listed value is Up to 8.75% savings on retirement pay. Amounts can change — confirm the current figure at the official source linked on this page.
How do I apply for Military Retirement Income Tax Exemption (Act 71)?▾
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Military Retirement Income Tax Exemption (Act 71)?▾
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.

Other Vermont Tax Benefits

Vermont Veteran Tax Credit (Act 71)

Up to $250 refundable tax credit for Vermont resident veterans with AGI of $25,000 or less.

Up to $250

Property Tax Exemption for Disabled Veterans

$10,000-$40,000 exemption off appraised home value for veterans rated 50%+ disability (amount varies by town vote).

$200-$800/year depending on town

See every benefit you qualify for in Vermont

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