Vermont proposes new tax credit for veterans amid budget considerations
May 17, 2025 | Finance, SENATE, Committees, Legislative , Vermont
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In a recent Senate Finance meeting held in Vermont, lawmakers discussed significant changes to tax credits aimed at supporting military retirees and veterans. The meeting highlighted a proposed tax credit structure that seeks to provide financial relief to a broader range of veterans, reflecting the state's commitment to its military community.
The proposed tax credit is designed to be means-tested, aligning with existing income thresholds used for other tax credits, such as the child tax credit. Under the new plan, veterans with an adjusted gross income (AGI) of $25,000 or below would be eligible for a fully refundable credit of $250. This credit would gradually phase out for those with incomes above $30,000, ensuring that the most financially vulnerable veterans receive the maximum benefit.
Currently, Vermont has approximately 34,000 veterans, significantly outnumbering the 3,900 military retirees in the state. The meeting underscored the distinction between veterans and retirees, with the latter group primarily consisting of those receiving pension benefits. The proposed tax credit aims to address the needs of all veterans, including those who may not have served in combat but still contributed to the military.
The financial implications of this proposal are noteworthy. The budget accommodates $13.5 million for various tax credits and exemptions, with the veteran tax credit being a key component. This initiative is part of a broader effort to ensure that tax expenditures remain within budgetary constraints while providing essential support to veterans.
Additionally, the meeting touched on the tax treatment of disability payments for veterans, although no definitive answers were provided. This topic remains an area of interest as lawmakers seek to clarify how such payments are classified under Vermont law.
As discussions continue, the proposed tax credit for veterans represents a significant step towards enhancing financial support for those who have served in the military. The Senate Finance Committee's ongoing deliberations will determine the final structure and implementation of these credits, with the potential to positively impact thousands of veterans across Vermont.
The proposed tax credit is designed to be means-tested, aligning with existing income thresholds used for other tax credits, such as the child tax credit. Under the new plan, veterans with an adjusted gross income (AGI) of $25,000 or below would be eligible for a fully refundable credit of $250. This credit would gradually phase out for those with incomes above $30,000, ensuring that the most financially vulnerable veterans receive the maximum benefit.
Currently, Vermont has approximately 34,000 veterans, significantly outnumbering the 3,900 military retirees in the state. The meeting underscored the distinction between veterans and retirees, with the latter group primarily consisting of those receiving pension benefits. The proposed tax credit aims to address the needs of all veterans, including those who may not have served in combat but still contributed to the military.
The financial implications of this proposal are noteworthy. The budget accommodates $13.5 million for various tax credits and exemptions, with the veteran tax credit being a key component. This initiative is part of a broader effort to ensure that tax expenditures remain within budgetary constraints while providing essential support to veterans.
Additionally, the meeting touched on the tax treatment of disability payments for veterans, although no definitive answers were provided. This topic remains an area of interest as lawmakers seek to clarify how such payments are classified under Vermont law.
As discussions continue, the proposed tax credit for veterans represents a significant step towards enhancing financial support for those who have served in the military. The Senate Finance Committee's ongoing deliberations will determine the final structure and implementation of these credits, with the potential to positively impact thousands of veterans across Vermont.
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