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. The bill modifies Section 5823(a) of Title 32 by adding a new provision that specifically includes this allowance as a non-taxable income for eligible National Guard members. The existing language regarding military pay for full-time active duty and unit training is retained, but the bill removes the requirement for the first $2,000 of military pay for unit training to be applicable only to those with a federal adjusted gross income of less than $50,000.

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 the exemption will be applicable for tax purposes starting in 2025, allowing National Guard members to benefit from this change in the law for their prior tax filings.

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