The bill H.603, introduced by Representative Ode of Burlington, aims to amend the current taxation laws in Vermont by excluding military disability retirement income from personal income taxation. Specifically, it adds provisions to 32 V.S.A. § 5830e, stating that U.S. military disability retirement income, as defined under 10 U.S.C. chapter 61, will be excluded from taxable income. Additionally, it outlines the conditions under which other forms of U.S. military retirement income and survivor benefit income can be excluded based on the taxpayer's federal adjusted gross income, with specific thresholds and calculations provided for different income brackets.

Furthermore, the bill stipulates that taxpayers eligible for multiple exclusions must choose only one, but those eligible for the military retirement and survivor benefit exclusion can opt for it without affecting their eligibility for other exclusions. The effective date of this legislation is set to be retroactive to January 1, 2026, applying to taxable years beginning on or after that date.

Statutes affected:
As Introduced: 32-5830e