Bill H.76 proposes an amendment to Vermont's income tax law to exempt the State active duty subsistence and quarters allowance paid to members of the National Guard from personal income tax. Specifically, it modifies Section 5823(a) of Title 32 by adding a provision that includes this allowance as a non-taxable income for qualifying individuals. The bill also retains existing exemptions for military pay earned outside the state and for certain training pay for National Guard and U.S. Reserve personnel, while removing the previous language that limited the exemption to the first $2,000 of military pay for unit training.

Additionally, the bill establishes an effective date of January 1, 2026, with retroactive application to taxable years beginning on or after January 1, 2025. This means that eligible National Guard members will benefit from this tax exemption for the specified prior tax years, providing financial relief for those serving in active duty.

Statutes affected:
As Introduced: 32-5823(a), 32-5823