Vermont H. 603: An act relating to human trafficking

Bill Text

BILL AS INTRODUCED H.603
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VT LEG #386322 v.1
H.603 1
Introduced by Representative Ode of Burlington 2
Referred to Committee on 3
Date: 4
Subject: Taxation; personal income tax; veterans; disability income 5
Statement of purpose of bill as introduced: This bill proposes to exclude 6
military disability retirement income from income taxation. 7
An act relating to excluding military disability retirement from personal 8
income taxation 9
It is hereby enacted by the General Assembly of the State of Vermont: 10
Sec. 1. 32 V.S.A. § 5830e is amended to read: 11
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 12
* * * 13
(d) U.S. military disability retirement income, U.S. military retirement 14
income, and U.S. military survivor benefit income. All military disability 15
retirement income provided in accordance with 10 U.S.C. chapter 61 shall be 16
excluded from taxable income under subdivision 5811(21)(B)(iv) of this 17
chapter. For taxpayers of any filing status, other U.S. military retirement 18
income, and U.S. military survivor benefit income received by an eligible 19

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VT LEG #386322 v.1
beneficiary, received by a taxpayer of this State shall be excluded from taxable 1
income under subdivision 5811(21)(B)(iv) of this chapter as follows: 2
(1) If the federal adjusted gross income of the taxpayer is less than or 3
equal to $125,000.00, all federally taxable U.S. military retirement income and 4
survivor benefit income shall be excluded. 5
(2) If the federal adjusted gross income of the taxpayer is greater than 6
$125,000.00 but less than $175,000.00, the percentage of federally taxable 7
U.S. military retirement income and survivor benefit income to be excluded 8
shall be proportional to the amount of the taxpayer’s federal adjusted gross 9
income over $125,000.00, determined by: 10
(A) subtracting the federal adjusted gross income of the taxpayer 11
from $175,000.00; 12
(B) dividing the value under subdivision (A) of this subdivision (2) 13
by $50,000.00; and 14
(C) multiplying the value under subdivision (B) of this subdivision 15
(2) by the federally taxable U.S. military retirement income and survivor 16
benefit income received. 17
(3) If the federal adjusted gross income of the taxpayer is equal to or 18
greater than $175,000.00, no amount of the federally taxable U.S. military 19
retirement income and survivor benefit income received shall be excluded 20
under this section. 21

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VT LEG #386322 v.1
(e)(1) Requirement to elect one exclusion. A taxpayer of this State who is 1
eligible during the taxable year for more than one of the exclusions under 2
subsections (a), (b), and (c) of this section shall elect only one of the 3
exclusions for which the taxpayer is eligible. 4
(2) A taxpayer of this State who is eligible during the taxable year for 5
the military retirement and survivor benefit exclusion under subsection (d) of 6
this section may elect that exclusion regardless of whether the taxpayer also 7
elects an exclusion under subsections (a)–(c) of this section. 8
Sec. 2. EFFECTIVE DATE 9
Notwithstanding 1 V.S.A. § 214, this section and Sec. 1 (military disability 10
retirement income) shall take effect retroactively on January 1, 2026, and shall 11
apply to taxable years beginning on and after January 1, 2026. 12