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Category: Vermont

Vermont Military Filing Information

Vermont Exemptions for Military Pay

The following items are exempt from Vermont income tax:

Residents - Military pay for full-time active duty with the armed services when the pay is earned outside of Vermont. 32 VSA §5823(a)(2) This includes training, other than unit training, held outside of VT for 15 days or more.

Non-Residents - Military pay for full-time active duty with the armed services. 32 VSA §5823(a)(3) -

Military income is not included when computing the Vermont tax on other Vermont income for non-residents as required by Public Law 180-189, Service members Civil Relief Act effective tax year 2003.

$2,000 of military pay for unit training in Vermont for National Guard and U.S. Reserve personnel when the unit certifies the training was completed during the calendar year and the service member’s Federal adjusted gross income is less than $50,000 - 32 VSA 55823(a)(2) & 32VSA §5823(a)(3)

Funds received through the federal armed forces educational loan repayment program under 10 U.S.C. chapters 109 and 1609, to the extent the funds are included in adjusted gross income of the taxpayer for the taxable year 32 VSA 85823(a)(3) & 32 VSA 85823(a)(3)

To Subtract your Military Pay go to the Subtractions from Income page of the state menu:
Enter the amount of VT exempt military pay received in 2014 that is included in your Federal adjusted gross income. Exempt military pay is:

I. Wages earned from the armed services for full-time active duty outside of VT. Supporting Documents Required: Copy of active duty orders.

II. Up to $2,000 for National Guard or U.S. Reserve training pay earned in VT if your adjusted gross income for tax year 2014 is less than $50,000. Supporting Documents Required: Copy of DFAS form or certification statement from unit that all training was completed during the calendar year.

III. Student loan repayment can be taken only if the amount is included in your adjusted gross income. Enter the repayment benefit made under 10 U.S.C. Chapters 109 and 1609 for 2014 year. Supporting Documents Required: Certification statement from armed services showing your name, address, social security number, amount of student loan repayment, and payment date.