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.
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About this benefit
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
Claimed when filing Vermont state income tax return.
Verified against official source
Last checked 2026-05-06 against tax.vermont.gov. Always confirm current rates and rules with the Vermont state agency before applying.
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
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