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.
State BenefitVermontTax Benefits
Verified September 30, 2026 against tax.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
- September 30, 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
- Veterans
- Survivors
- Available to any veteran
- Vermont residency
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.
Verified information & sources
- Last verified
- September 30, 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.
How VetUnlock verifies benefitsFrequently 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 $250Up to $250 refundable tax credit for Vermont resident veterans with AGI of $25,000 or less.
- Property Tax Exemption for Disabled Veterans$200-$800/year depending on town$10,000-$40,000 exemption off appraised home value for veterans rated 50%+ disability (amount varies by town vote).