Vermont Veteran Financial Benefits
Vermont Income Tax Exemptions on Military Pay: Active-duty Service members in the U.S. Armed Forces are exempt from Vermont income taxes on military pay earned outside the state. For members of the Vermont National Guard or U.S. Armed Forces Reserves, up to $2,000 of military pay is tax-free if the federal adjusted gross income is below $50,000. Funds received through the College Loan Repayment Program are also exempt from Vermont taxes if included in federal adjusted gross income.
Vermont Taxes on Military Retired Pay: Retired Service members residing in Vermont with annual incomes of $50,000 or less (single filers) or $65,000 or less (joint filers) are exempt from Vermont income taxes on the first $10,000 of military retired pay.
Thrift Savings Plan (TSP): State or local taxes are not withheld from TSP distributions, but these amounts are reported on IRS Form 1099-R and remain subject to state taxes. Early withdrawals may incur higher taxes.
Military Disability Retirement Pay: Disability retirement pay from active service in the U.S. Armed Forces, including pensions, annuities, or allowances for injuries or sickness, is not taxable. This includes VA disability compensation, home or vehicle grants for Veterans with mobility limitations, and dependent-care assistance benefits.
VA Disability Dependency and Indemnity Compensation (DIC): Survivors of Service members who died on active duty or Veterans who passed from service-related conditions receive tax-free DIC benefits in Vermont.
Military Survivor Benefit Plans: Surviving spouses earning $50,000 or less annually may claim a Vermont tax exemption on the first $10,000 of survivor annuities from SBP, RCSBP, or RSFPP plans.
Vermont Property Tax Filing Benefits During Military Conflict: Service members called to full-time active duty in a designated combat zone, serving in such an area, or hospitalized due to related injuries can qualify for:
- Income Tax Extension: 180 days to file taxes after qualifying service.
- Property Tax Penalty and Interest Relief: 180-day extension without fees or interest, pending municipal approval.
- Homestead Declaration Abatement: 180-day extension or correction of late/incorrect Homestead Declaration due to active duty service.
- Combat Zone Property Tax Credit & Renter Rebate: 180-day filing extension for property tax credits or renter rebates, submitted via myVTax, tax software, or by mail.
Property Tax Exemption for Disabled Veterans and Survivors: Vermont exempts up to $10,000 of primary residence value for disabled Veterans or their surviving family members, with local municipalities able to increase the exemption up to $40,000. Eligible individuals include:
- Veterans with a VA service-connected disability rating of 50% or more
- Veterans receiving non-service-connected VA disability pensions
- Veterans medically retired from the U.S. Armed Forces
- Un-remarried surviving spouses or minor children of eligible Veterans
Sales Tax:
- Statewide rate: 6.0%
- County additions: up to 1.0%
- Average combined rate: 6.30%
Recreation
Vermont Free Disabled Veteran Hunting, Fishing, and Combination Licenses
Vermont provides free hunting, fishing, or combination licenses to qualified disabled Veterans.
Eligibility: Vermont residents with a VA service-connected disability rating of 60% or higher qualify for a permanent, no-cost fishing, hunting, or combination license. Veterans from Maine or New Hampshire with the same disability rating are eligible for a free one-year reciprocal Vermont license.
Active Duty and Reserve Service Member License Benefits: Vermont residents serving on active duty or reserve members activated for state-side operations or homeland defense for 120+ consecutive days can receive a free one-year fishing, hunting, or combination license. Nonresident Service members stationed in Vermont may purchase licenses at resident rates. Applicants must comply with Vermont Hunting License requirements.
Green Mountain Passport Lifetime Pass for Veterans: Vermont resident Veterans who were honorably discharged can obtain a lifetime Green Mountain Passport for $2. This pass grants free day access to Vermont State Parks, historic sites, and state-sponsored events. Passes are available through local city or town clerk offices only.
Education Programs
Vermont National Guard Tuition Benefit Program (VNGTBP)
The VNGTBP provides interest-free, forgivable loans to Vermont National Guard (VTNG) Service members, meaning part or all of the loan may be waived. Loans are available for:
- First or second bachelor’s degrees
- Master’s degrees
- Up to two certificate programs per term, four per year
The loans cover tuition only, and Service members must use all federal tuition benefits first.
Loan Forgiveness: Loan forgiveness is tied to VTNG service:
- Two years of service for each full-time academic year (12+ credits)
- Pro-rated service for less than 12 credits
- Six-month service commitment per certificate program
Eligibility: To qualify, Service members must:
- Complete basic training or commissioning and be in good standing with the VTNG
- Attend an approved Vermont college, university, or training program
- Maintain satisfactory academic progress
- Not be in default on federal education loans
Vermont Armed Services Scholarship
This scholarship assists families of Service members who died on active or inactive duty, covering education at Vermont colleges, universities, or technical schools (excluding postgraduate programs). The award can be applied to up to 18 credits per semester, totaling a maximum of 130 credits. Pell Grants reduce the amount awarded.
Eligibility: Applicants must be a child, stepchild, or surviving spouse of:
- Vermont National Guard members killed after 1955 or after January 1, 2001, on active or inactive duty
- Vermont resident U.S. Armed Forces Reserve members who died after January 1, 2001
- Active-duty Service members who died after January 1, 2001, either Vermont residents or nonresident VTNG/Reserve members mobilized to active duty
Vermont High School Diplomas for Wartime Veterans
Vermont offers high school diplomas to Veterans who left school early to serve in WWII, the Korean War, or the Vietnam War.
Eligibility: Honorably discharged Veterans who left a Vermont high school before graduating during:
- WWII: Dec 7, 1941 – Dec 31, 1946
- Korean War: Jun 27, 1950 – Jan 31, 1955
- Vietnam War: Aug 5, 1964 – May 7, 1975 (outside Vietnam) / Feb 28, 1961 – May 7, 1975 (inside Vietnam)
Graduates may receive their diploma from any Vermont public school listed on the application.
Vermont Interstate Compact on Educational Opportunity for Military Children (MIC3)
MIC3 removes barriers to education for children of military families caused by frequent moves or deployments by:
- Ensuring smooth enrollment and record transfers
- Facilitating fair student placement and program participation
- Supporting on-time graduation
- Implementing uniform rules and information sharing
- Coordinating with other compacts affecting military children
- Promoting cooperation between schools, parents, and students
Vermont Purple Star Campus Designation
This designation recognizes schools committed to military-connected students and families.
Eligibility: To qualify, a school must:
- Appoint a trained school liaison for military families
- Ensure teachers are aware of special considerations
- Maintain a dedicated webpage with resources for military families
Housing: Locations of Veterans Homes
Vermont Veterans’ Home: Situated in Bennington, Vermont, the Vermont Veterans’ Home offers long-term care and rehabilitation services for Veterans and their qualifying family members.
This licensed residential healthcare facility is staffed by highly trained professionals and provides a comprehensive array of care and support services.
Vermont State Veterans Home at Bennington
Services Offered:
- Skilled nursing care for short-term and long-term needs
- Post-surgery and wound management
- Physical, occupational, speech, and rehabilitation therapies
- Specialized Alzheimer’s and dementia care unit
- Medical social work support
- Respite care for caregivers
- Nutritional and dietary services
- Podiatry care
- Dental care
- Palliative and end-of-life care
- Transportation assistance
- Family guest accommodations
Eligibility for Care at Vermont Veterans’ Home:
Veterans must have served a minimum of 90 days in the U.S. Armed Forces and received an honorable discharge. Admission is also open to Gold Star parents, spouses, and surviving spouses of eligible Veterans. While Vermont residency is not mandatory, preference is given to residents.
The Vermont Veterans’ Home accepts private payments, Medicare, and Vermont Medicaid. Veterans with a service-connected disability rating of 70% or higher may have their care covered by the VA.
Employment and Job Training: Veterans’ Preference
Vermont Authorized Leave for Military Training:
Service members in Vermont who serve in a reserve component of the U.S. Armed Forces are entitled to a 15-day leave of absence per calendar year for military drills, training, or other temporary military duty. This leave may be paid or unpaid, depending on the employer. Upon returning, the Service member must be reinstated to their previous job with the same pay, status, and seniority, including any seniority accrued during their absence.
Vermont State Employment Veterans’ Hiring Preference:
Vermont provides veterans’ preference in state hiring by awarding additional points to eligible applicants’ scores. Eligible veterans may also apply for positions reserved for current state employees or for “State Promotional Only” vacancies.
Eligibility for State Veterans’ Preference:
- Veterans who served at least 90 days on active duty and received an honorable discharge
- Veterans with a service-connected disability
- Spouses of totally disabled Veterans
- Un-remarried surviving spouses of Veterans
Veterans Employment Assistance in Vermont:
The Vermont Department of Labor offers support through trained staff at Job Centers to help Veterans identify employment and training opportunities. Disabled Veterans Outreach Program (DVOP) representatives assist Veterans with disabilities or employment barriers in finding suitable work.
Federal Employment Veterans’ Hiring Preference:
Federal law ensures Veterans, particularly those with disabilities or specific military service, receive preference over non-veterans in federal civil service hiring and retention. Veterans may earn 5 or 10 additional points during examinations and interviews.
- 5-Point Preference: For Veterans who served during a war, certain historical periods, the Gulf War, post-9/11 conflicts, or in campaigns qualifying for a medal.
- 10-Point Preferences: Include compensable disabilities (10–29%), disabilities of 30% or more, Purple Heart recipients, and certain derived preferences for spouses, surviving spouses, or parents of Veterans. Special provisions exist for spouses of disabled Veterans disqualified for federal positions due to service-connected disabilities.
Uniformed Services Employment and Reemployment Rights Act (USERRA):
USERRA safeguards civilian job rights and benefits for Veterans and reserve members. Key provisions include:
- Military Absence: Reemployment rights extend for up to five years, with exceptions for long-term enlistments, periodic training, and involuntary active duty extensions.
- Disability Accommodation: Employers must reasonably accommodate service-connected injuries, allowing up to two years post-service for reintegration.
- Return to Work: Service members return to their pre-service job with equivalent pay, seniority, and benefits, with access to retraining if needed.
- Health and Pension Coverage: Service members on duty over 30 days may continue employer-sponsored healthcare for up to 24 months, and pension protections are maintained.
Eligibility for USERRA Benefits:
Veterans, National Guard, and Reserve Service members who leave a position for training or active duty qualify. The Department of Labor, through VETS, assists with claims under USERRA, including for federal and postal employees.
Burials and Memorials
Be sure to record your preference for burial in a national cemetery and the use of a VA-provided headstone, and keep this information with your important documents and medical records.
The National Cemetery Administration (NCA) honors eligible Veterans and their families by offering a dignified final resting place and a lasting tribute to the Veteran’s service to the nation.
Burial benefits include a gravesite in any open national cemetery with available space, the opening and closing of the grave, ongoing maintenance, a government-supplied headstone or marker, a burial flag, and a Presidential Memorial Certificate, all provided at no cost to the family. Eligible Veterans may also qualify for a burial allowance. Cremated remains receive the same respect and honors as casketed burials when interred or inurned.
These benefits also extend to qualified spouses and dependents. They may be buried alongside the Veteran, and the grave will receive perpetual care. The names and birth/death dates of spouses or dependents can be engraved on the Veteran’s headstone at no cost. Spouses and eligible dependents may be buried even if they pass away before the Veteran and are not required to be interred in the same national cemetery.
National Cemeteries include:
Brattleboro: Prospect Hill Cemetery Soldiers’ Lot (VT)
Montpelier: Green Mount Cemetery Soldiers’ Lot
Vermont Veteran Resources
Veterans in Vermont have access to a Regional Benefits Office as well as a VA Medical Center.
Vermont VA Regional Benefits Office
- White River Junction: White River Junction Regional Office
Vermont VA Medical Centers
- White River Junction: White River Junction VA Medical Center
Key Information on Vermont Veteran Benefits:
Veterans applying for VA benefits for the first time must provide a copy of their DD 214 (discharge papers). This document shows your discharge status, full name, social security number, branch of service, and dates of service. Most VA benefits are available to Veterans with honorable or general discharges.
It’s important to store your paperwork and medical records in a secure location where both you and your family can access them. Keeping these documents safe from damage or tampering, such as in a lockbox or safe, is essential.
Eligibility for most VA benefits depends on discharge from active military service under conditions other than dishonorable. Active service includes full-time service in the Army, Navy, Air Force, Marine Corps, or Coast Guard, or as a commissioned officer in the Public Health Service, Environmental Services Administration, or National Oceanic and Atmospheric Administration.
Veterans who received a dishonorable discharge due to misconduct from a general court-martial may not qualify for VA benefits. However, certain benefits may still be available to Veterans who are incarcerated or on parole. VA regional offices can provide guidance on eligibility for those with multiple or unique discharge circumstances.
*Information current as of November 2023.
Vermont Veteran Benefits
Disabled Veterans in Vermont with a VA disability rating of 90% or lower may qualify for extra benefits. Reach out to Vital Veterans Consultants for a complimentary, no-obligation consultation. We can review your claim to see if you are eligible for a higher VA compensation rating and identify any additional benefits you may qualify for.
