State veteran benefits · VT
Vermont Veteran Benefits
Vermont stopped taxing military retirement in 2025 for households with adjusted gross income up to $125,000, a full exemption that phases out entirely at $175,000.
By Mario Bailey, U.S. Air Force veteran · current Air National Guard member. Data updated 2026-07-10.
What Vermont adds, benefit by benefit
Your federal VA benefits travel with you to any state. Everything below is the second stack: what Vermont itself offers, each item checked against the state's own official source on the date shown.
A $10,000 to $40,000 exemption your town's voters set
Vermont law mandates at least a $10,000 reduction in the appraised value of the primary residence for veterans receiving disability compensation at 50 percent or higher, VA non-service-connected (improved) pension, or permanent medical military retirement, and for surviving spouses of veterans who had the exemption. Towns may vote to raise the figure to $40,000, so the benefit's size depends on your zip code.
The exemption comes off appraised value before taxes are computed: a $200,000 home in a $20,000-exemption town is taxed as $180,000. Raising a town's exemption takes a ballot measure through local procedures, which veterans groups have done town by town.
SOURCE: Vermont Office of Veterans Affairs · retrieved 2026-07-10
Military retirement exempt up to $125,000 AGI, new for 2025
Act 71 of 2025, retroactive to tax years beginning January 1, 2025, exempts all military retirement and military survivor benefit income from Vermont tax for taxpayers of any filing status with adjusted gross income of $125,000 or less. The exemption tapers between $125,000 and $175,000 of AGI and disappears above that. Before this, Vermont exempted only $10,000. VA disability compensation is never taxed, by Vermont or the IRS.
The same act created a $250 refundable Vermont Veteran Tax Credit for any resident veteran with a discharge record and AGI of $25,000 or less, phasing out at $30,000. Taxpayers eligible for multiple retirement exemptions may take the military one plus only one of the Social Security or CSRS exemptions.
SOURCE: Vermont Department of Taxes · retrieved 2026-07-10
Armed Services Scholarship for survivors; Guard tuition for the serving
Vermont has no general tuition waiver for veterans. Its state education money goes to survivors and the National Guard: the Armed Services Scholarship covers full tuition at Vermont state schools (and reduces it at private ones) for the spouse and children of service members who died on active duty since 2001, or of Vermont National Guard members who died while serving at any time. Guard members have their own tuition assistance through the VTNG education office.
SOURCE: Vermont Office of Veterans Affairs · retrieved 2026-07-10
Internal state postings opened to veterans
Vermont gives veterans increased access to state hiring: veterans may apply for state positions that are normally open only to current state employees, effectively treating a veteran's application as an internal one through the Department of Human Resources career system.
SOURCE: Vermont Office of Veterans Affairs · retrieved 2026-07-10
Vermont Veterans' Home, Bennington
The Vermont Veterans' Home at 325 North Street in Bennington is a residential and healthcare campus providing rehabilitation, long-term, and skilled nursing care for veterans, their spouses, and Gold Star parents.
SOURCE: Vermont Veterans' Home · retrieved 2026-07-10
Free permanent license at 60 percent, ever
A Vermont resident veteran who is, or ever has been, rated 60 percent or more disabled from a service-connected disability gets a free permanent fishing license, or a free permanent combination hunting and fishing license if qualified to hunt. The 'ever has been' wording matters: a later rating reduction does not claw the license back.
Every honorably discharged resident veteran, at any rating or none, can also buy the Green Mountain Passport through their town clerk for $2: lifetime free day-use entry to Vermont state parks and historic sites.
SOURCE: Vermont Fish & Wildlife Department · retrieved 2026-07-10
Vermont Veterans Memorial Cemetery, Randolph Center
The state cemetery in Randolph Center provides a veteran's plot, perpetual care, marker, and funeral honors free of charge; spouses are interred for a nominal charge. A non-denominational chapel hosts burial services, and a memorial garden allows a stone for veterans buried at sea or scattered. Pre-registration through the Office of Veterans Affairs settles paperwork before the time of need.
SOURCE: Vermont Office of Veterans Affairs · retrieved 2026-07-10
For twenty years the standard advice to a retiring E-8 was simple: do not retire in Vermont. Act 71 changed the math in 2025. A military pension is now fully exempt for any household under $125,000 of adjusted gross income, which covers the large majority of enlisted and most officer retirees, and the exemption is retroactive to the start of tax year 2025, so a retiree who moved in expecting the old $10,000 cap should amend the estimate, not the address. The cliff behavior deserves respect, though: between $125,000 and $175,000 the exemption melts away, so a working spouse’s raise or a large capital gain can convert an untaxed pension into a taxed one. In a phase-out year, timing income matters more than the pension itself. Either way, the VA disability check never enters the return.
Property tax is where Vermont’s town-meeting culture shows up in a benefit table. The state guarantees $10,000 off appraised value at 50 percent disability and up; whether you get $10,000 or $40,000 depends on what your town voted. Two otherwise identical veterans across a town line can see a fourfold difference, and the fix is political, not administrative: a ballot article. Before buying a house here, ask the town clerk for the current exemption level the way you would ask about the school district.
The education column is the honest disappointment. A Vermont veteran with unused Post-9/11 GI Bill entitlement has a strong federal position, but once Chapter 33 runs out the state adds nothing unless you are Guard or a surviving family member. The Armed Services Scholarship, full state-school tuition for the families of the fallen, is generous precisely because it is narrow.
Vermont fits the moderate-income military retiree and the 60-percent-and-up outdoorsman: pension untaxed, permanent license free and immune to rating reductions, a $2 lifetime park pass, and Randolph Center closing out the burial plan at no cost to the veteran. The commonly missed benefit is the new $250 refundable credit for veterans under $25,000 AGI; it is small, but it is cash, it requires nothing but a discharge record and a tax return, and the veterans most likely to qualify are the least likely to file.
Where to apply
State benefits are administered by the state, not by VA, so the applications above run through Vermont Office of Veterans Affairs or the specific agency named in each source link. A free VA-accredited representative or VSO in Vermont will know both stacks, the federal claim and the state paperwork, and charges nothing to help with either.