Vermont Income Tax Exemption on Military Disability Retirement Pay
Military disability retirement pay received as a pension or annuity for a personal injury or sickness resulting from active military service is fully excluded from Vermont taxable income.
Details
Military disability retirement pay received as a pension or annuity for a personal injury or sickness resulting from active military service is fully excluded from Vermont taxable income. This applies to veterans who retired due to disability.
Restrictions
Distinct from the partial military retired pay exemption. Disability retirement pay is fully excluded, not capped at $10,000. DIC (Dependency and Indemnity Compensation) paid to survivors is also tax-free.
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