The bill amends several sections of Vermont tax law to enhance tax credits for residents, particularly focusing on child tax credits, earned income tax credits, and retirement income exclusions. Notably, the child tax credit is increased from $1,000 to $1,000 per qualifying child who is six years old or younger, and eligibility is expanded to include individuals without taxpayer identification numbers. The earned income tax credit is adjusted to provide 38% for individuals claiming qualifying children and 100% for those not claiming children, also allowing those without identification numbers to qualify. Additionally, the income thresholds for excluding federally taxable Social Security and Civil Service Retirement System benefits are raised, and new provisions are added to exclude U.S. military retirement and survivor benefit income based on adjusted gross income.

Furthermore, the bill introduces a new Vermont Veteran Tax Credit, providing a refundable credit for residents who have served in the uniformed services, with specific income thresholds determining the amount of the credit. The credit is set at $250 for those with an adjusted gross income of $25,000 or less, decreasing incrementally for incomes up to $30,000. The act is retroactively effective from January 1, 2025, applying to taxable years beginning on or after that date.

Statutes affected:
As Introduced: 32-5813
As Passed By the Senate -- Official: 32-5813
As Passed By the Senate -- Unofficial: 32-5813
As Passed by Both House and Senate -- Official: 32-5813, 32-5830f, 32-5828b, 32-5830e
As Passed by Both House and Senate -- Unofficial: 32-5830f, 32-5828b, 32-5830e, 32-5813
As Enacted: 32-5830f, 32-5828b, 32-5830e, 32-5813