Vermont H 584: An act relating to excluding public safety pension and survivor benefit income from income taxation

Bill Text

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VT LEG #386326 v.1
H.584 1
Introduced by Representative Casey of Montpelier 2
Referred to Committee on 3
Date: 4
Subject: Taxation; income tax; public safety pensions 5
Statement of purpose of bill as introduced: This bill proposes to exclude 6
income from public safety pensions and survivor benefits from Vermont 7
income taxation. 8
An act relating to excluding public safety pension and survivor benefit 9
income from income taxation 10
It is hereby enacted by the General Assembly of the State of Vermont: 11
Sec. 1. 32 V.S.A. § 5811 is amended to read: 12
§ 5811. DEFINITIONS 13
As used in this chapter unless the context requires otherwise: 14
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(21) “Taxable income” means, in the case of an individual, federal 16
adjusted gross income determined without regard to 26 U.S.C. § 168(k) and: 17
* * * 18
(B) decreased by the following items of income (to the extent such 19
income is included in federal adjusted gross income): 20

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VT LEG #386326 v.1
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(iv) the portion of certain retirement income and federally taxable 2
benefits received under the federal Social Security Act that is required to be 3
excluded under section 5830e of this chapter; 4
(v) the amount of any federal deduction or credit that the taxpayer 5
would have been allowed for the cultivation, testing, processing, or sale of 6
cannabis or cannabis products as authorized under 7 V.S.A. chapter 33 or 37, 7
but for 26 U.S.C. § 280E; and 8
(vi) the amount of interest paid by a qualified resident taxpayer 9
during the taxable year on a qualified education loan for the costs of attendance 10
at an eligible educational institution; and 11
(vii) any pension or survivor benefit income received from a U.S. 12
state or municipality relating to service as a police officer, firefighter, or 13
emergency medical technician; and 14
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Sec. 2. 32 V.S.A. § 5813 is amended to read: 16
§ 5813. STATUTORY PURPOSES 17
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(bb) The statutory purpose of the exemption of pension and survivor 19
benefit income in subdivision 5811(21)(B)(vii) of this title is to lessen the tax 20

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VT LEG #386326 v.1
burden on Vermonters who derive part of their income from benefits for public 1
safety professionals. 2
Sec. 3. EFFECTIVE DATE 3
Notwithstanding 1 V.S.A. § 214, this act shall take effect retroactively on 4
January 1, 2026, and apply to taxable years beginning on and after January 1, 5
2026. 6