Vermont Veterans Benefits

Reduces the assessed value of a disabled veteran's primary residence (fee-simple owned) before tax is calculated. Eligible if the veteran has a VA service-connected disability rating of 50% or higher, OR receives a non-service-connected VA pension (improved pension), OR has a permanent medical military retirement. State law mandates a minimum exemption; towns may vote to increase it. Available to unremarried surviving spouses and minor children of qualifying veterans. Application filed with the Vermont Office of Veterans Affairs by May 1; for permanent disability it is filed once and remains on the grand list until the property is transferred.

Refundable $250 income tax credit for any Vermont resident or part-year resident with a discharge/separation record verifying uniformed service, whose AGI is at or below $25,000. The credit phases down for AGI between $25,000 and $30,000 and is unavailable at AGI above $30,000. Effective 2025 tax year. Does not require a disability rating.

Income-tiered exemption effective beginning the 2025 tax year (claimed when filing in 2026). Military retirement pay and survivor benefit income are fully exempt from Vermont income tax if AGI is at or below $125,000; the exemption phases down for AGI between $125,000 and $175,000; no exemption at $175,000 or above. Applies to any filing status. This is a major change from Vermont's prior full taxation of military retirement.

Vermont allows up to $2,000 of National Guard and Reserve pay (for unit training assemblies/drill) to be excluded from Vermont income, available if federal AGI is under $50,000. Active duty pay earned while serving outside Vermont is also exempt.

Scholarship for the children and spouses of Vermont service members who were killed in the line of duty (service-connected death) after 2001. Administered through the state. Helps cover the cost of attending a Vermont postsecondary institution.

Interest-free, forgivable loan that pays up to 100% of tuition for active members in good standing of the Vermont National Guard who have completed basic training. Covers up to full tuition at Vermont State University or UVM, or up to UVM's tuition rate at a Vermont private or out-of-state school. Administered by VSAC. Covers tuition only (not fees, room, or board). Requires Guard membership, not a disability rating.

Veterans receive a preference in state civil service hiring, applied as added points to competitive examination/scoring. State employees who are members of a reserve component are also authorized up to 15 days of paid military leave per year for required training without loss of pay. Job counseling and training assistance is available through the Vermont Department of Labor.

Vermont DMV issues a Disabled Veteran license plate to veterans with a service-connected disability, plus a range of military/veteran specialty plates (U.S. Veteran, Purple Heart, Gold Star Family, etc.). The 'VETERAN' designation can also be added to a Vermont driver's license or ID card with proof of honorable service. Plates indicate status; the specialty plate itself does not by itself waive registration fees (see separate adapted-vehicle exemption).

NARROW benefit: A disabled veteran pays no vehicle sales/use tax, no registration fee, and no license fee ONLY where the vehicle was modified to accommodate the disability and the U.S. Department of Veterans Affairs paid for the modification. This is NOT a general exemption for disabled veterans; even 100% disabled veterans without a VA-funded vehicle adaptation are not exempt. Requires Form VG-168 (Vermont Certificate of Veteran Status, certified by the Office of Veterans Affairs) plus medical certification.

Vermont-resident veterans with a VA service-connected disability rating of 60% or greater qualify for a free permanent fishing, hunting, or combination license. Maine and New Hampshire resident veterans with a 60%+ rating qualify for a free one-year reciprocal Vermont license. Active duty/reserve members on 120+ days of activation receive a free one-year license. Apply to the Vermont Fish & Wildlife Department with a VA benefits-summary verification letter.

Lifetime pass giving free day-use entry to Vermont State Parks and Vermont State-owned Historic Sites. Available to any Vermont resident veteran who was honorably discharged from active duty in the U.S. armed services (also available to residents age 62+). Purchased for a one-time $2 fee through the applicant's local town clerk. No disability rating required.

State veterans cemetery offering burial at no cost for eligible veterans, including a government grave marker. Opening/closing (interment) fees apply for eligible spouses and dependent children. Military funeral honors are available through the Vermont National Guard.

State-operated long-term care facility in Bennington providing skilled nursing, rehabilitation, and long-term care to eligible Vermont veterans (and in some cases spouses and Gold Star parents). Cost is offset by VA per-diem and other benefits; admission is based on eligibility and need.

One-time emergency cash assistance administered by the Vermont Office of Veterans Affairs for Vermont-resident veterans and their families in financial crisis with a critical need such as housing or utilities. Applications are taken by phone (about 10 minutes) by calling the Office of Veterans Affairs. No disability rating required.