BILL AS INTRODUCED H.74
2025 Page 1 of 24
VT LEG #379192 v.1
H.74 1
Introduced by Representatives Harrison of Chittenden, Noyes of Wolcott, 2
Bailey of Hyde Park, Bartley of Fairfax, Birong of Vergennes, 3
Bosch of Clarendon, Boyden of Cambridge, Burditt of West 4
Rutland, Burrows of West Windsor, Burtt of Cabot, Casey of 5
Hubbardton, Christie of Hartford, Coffin of Cavendish, Cooper 6
of Pownal, Demar of Enosburgh, Dickinson of St. Albans 7
Town, Dobrovich of Williamstown, Galfetti of Barre Town, 8
Greer of Bennington, Gregoire of Fairfield, Hango of Berkshire, 9
Harple of Glover, Harvey of Castleton, Headrick of Burlington, 10
Higley of Lowell, Howard of Rutland City, Howland of Rutland 11
Town, Kascenska of Burke, Keyser of Rutland City, Krasnow 12
of South Burlington, Labor of Morgan, Laroche of Franklin, 13
Luneau of St. Albans City, Maguire of Rutland City, Malay of 14
Pittsford, Marcotte of Coventry, McCoy of Poultney, McFaun 15
of Barre Town, McGill of Bridport, Micklus of Milton, Morgan, 16
L. of Milton, Morgan, M. of Milton, Morris of Springfield, 17
Morrissey of Bennington, Morrow of Weston, Nielsen of 18
Brandon, North of Ferrisburgh, Ode of Burlington, Page of 19
Newport City, Pinsonault of Dorset, Priestley of Bradford, 20
Pritchard of Pawlet, Southworth of Walden, Surprenant of 21 BILL AS INTRODUCED H.74
2025 Page 2 of 24
VT LEG #379192 v.1
Barnard, Tagliavia of Corinth, Taylor of Milton, Toof of St. 1
Albans Town, Waszazak of Barre City, Wells of Brownington, 2
White of Bethel, Winter of Ludlow, and Wood of Waterbury 3
Referred to Committee on 4
Date: 5
Subject: Taxation; income tax; Social Security benefits; tax exemption 6
Statement of purpose of bill as introduced: This bill proposes to phase in a full 7
income tax exemption for Social Security benefits over eight years. The 8
existing partial exemption exempts a larger portion of Social Security benefits 9
each year for seven years and Social Security benefits become fully exempt in 10
the eighth year. 11
An act relating to exempting Social Security benefits from Vermont income 12
tax 13
It is hereby enacted by the General Assembly of the State of Vermont: 14
Sec. 1. 32 V.S.A. § 5830e is amended to read: 15
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 16
(a) Social Security income. The portion of federally taxable Social 17
Security benefits excluded from taxable income under subdivision 18
5811(21)(B)(iv) of this chapter shall be as follows: 19 BILL AS INTRODUCED H.74
2025 Page 3 of 24
VT LEG #379192 v.1
(1) For taxpayers whose filing status is single, married filing separately, 1
head of household, or surviving spouse: 2
(A) If the federal adjusted gross income of the taxpayer is less than or 3
equal to $50,000.00 $65,000.00, all federally taxable benefits received under 4
the federal Social Security Act shall be excluded. 5
(B) If the federal adjusted gross income of the taxpayer is greater 6
than $50,000.00 $65,000.00 but less than $60,000.00 $75,000.00, the 7
percentage of federally taxable benefits received under the Social Security Act 8
to be excluded shall be proportional to the amount of the taxpayer’s federal 9
adjusted gross income over $50,000.00 $65,000.00, determined by: 10
(i) subtracting the federal adjusted gross income of the taxpayer 11
from $60,000.00 $75,000.00; 12
(ii) dividing the value under subdivision (i) of this subdivision (B) 13
by $10,000.00; and 14
(iii) multiplying the value under subdivision (ii) of this 15
subdivision (B) by the federally taxable benefits received under the Social 16
Security Act. 17
(C) If the federal adjusted gross income of the taxpayer is equal to or 18
greater than $60,000.00 $75,000.00, no amount of the federally taxable 19
benefits received under the Social Security Act shall be excluded under this 20
section. 21 BILL AS INTRODUCED H.74
2025 Page 4 of 24
VT LEG #379192 v.1
(2) For taxpayers whose filing status is married filing jointly: 1
(A) If the federal adjusted gross income of the taxpayer is less than or 2
equal to $65,000.00 $80,000.00, all federally taxable benefits received under 3
the Social Security Act shall be excluded. 4
(B) If the federal adjusted gross income of the taxpayer is greater 5
than $65,000.00 $80,000.00 but less than $75,000.00 $90,000.00, the 6
percentage of federally taxable benefits received under the Social Security Act 7
to be excluded shall be proportional to the amount of the taxpayer’s federal 8
adjusted gross income over $65,000.00 $80,000.00, determined by: 9
(i) subtracting the federal adjusted gross income of the taxpayer 10
from $75,000.00 $90,000.00; 11
(ii) dividing the value under subdivision (i) of this subdivision (B) 12
by $10,000.00; and 13
(iii) multiplying the value under subdivision (ii) of this 14
subdivision (B) by the federally taxable benefits received under the Social 15
Security Act. 16
(C) If the federal adjusted gross income of the taxpayer is equal to or 17
greater than $75,000.00 $90,000.00, no amount of the federally taxable 18
benefits received under the Social Security Act shall be excluded under this 19
section. 20
* * * 21 BILL AS INTRODUCED H.74
2025 Page 5 of 24
VT LEG #379192 v.1
Sec. 2. 32 V.S.A. § 5830e is amended to read: 1
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 2
(a) Social Security income. The portion of federally taxable Social 3
Security benefits excluded from taxable income under subdivision 4
5811(21)(B)(iv) of this chapter shall be as follows: 5
(1) For taxpayers whose filing status is single, married filing separately, 6
head of household, or surviving spouse: 7
(A) If the federal adjusted gross income of the taxpayer is less than or 8
equal to $65,000.00 $77,000.00, all federally taxable benefits received under 9
the federal Social Security Act shall be excluded. 10
(B) If the federal adjusted gross income of the taxpayer is greater 11
than $65,000.00 $77,000.00 but less than $75,000.00 $87,000.00, the 12
percentage of federally taxable benefits received under the Social Security Act 13
to be excluded shall be proportional to the amount of the taxpayer’s federal 14
adjusted gross income over $65,000.00 $77,000.00, determined by: 15
(i) subtracting the federal adjusted gross income of the taxpayer 16
from $75,000.00 $87,000.00; 17
(ii) dividing the value under subdivision (i) of this subdivision (B) 18
by $10,000.00; and 19 BILL AS INTRODUCED H.74
2025 Page 6 of 24
VT LEG #379192 v.1
(iii) multiplying the value under subdivision (ii) of this 1
subdivision (B) by the federally taxable benefits received under the Social 2
Security Act. 3
(C) If the federal adjusted gross income of the taxpayer is equal to or 4
greater than $75,000.00 $87,000.00, no amount of the federally taxable 5
benefits received under the Social Security Act shall be excluded under this 6
section. 7
(2) For taxpayers whose filing status is married filing jointly: 8
(A) If the federal adjusted gross income of the taxpayer is less than or 9
equal to $80,000.00 $92,000.00, all federally taxable benefits received under 10
the Social Security Act shall be excluded. 11
(B) If the federal adjusted gross income of the taxpayer is greater 12
than $80,000.00 $92,000.00 but less than $90,000.00 $102,000.00, the 13
percentage of federally taxable benefits received under the Social Security Act 14
to be excluded shall be proportional to the amount of the taxpayer’s federal 15
adjusted gross income over $80,000.00 $92,000.00, determined by: 16
(i) subtracting the federal adjusted gross income of the taxpayer 17
from $90,000.00 $102,000.00; 18
(ii) dividing the value under subdivision (i) of this subdivision (B) 19
by $10,000.00; and 20 BILL AS INTRODUCED H.74
2025 Page 7 of 24
VT LEG #379192 v.1
(iii) multiplying the value under subdivision (ii) of this 1
subdivision (B) by the federally taxable benefits received under the Social 2
Security Act. 3
(C) If the federal adjusted gross income of the taxpayer is equal to or 4
greater than $90,000.00 $102,000.00, no amount of the federally taxable 5
benefits received under the Social Security Act shall be excluded under this 6
section. 7
* * * 8
Sec. 3. 32 V.S.A. § 5830e is amended to read: 9
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 10
(a) Social Security income. The portion of federally taxable Social 11
Security benefits excluded from taxable income under subdivision 12
5811(21)(B)(iv) of this chapter shall be as follows: 13
(1) For taxpayers whose filing status is single, married filing separately, 14
head of household, or surviving spouse: 15
(A) If the federal adjusted gross income of the taxpayer is less than or 16
equal to $77,000.00 $87,000.00, all federally taxable benefits received under 17
the federal Social Security Act shall be excluded. 18
(B) If the federal adjusted gross income of the taxpayer is greater 19
than $77,000.00 $87,000.00 but less than $87,000.00 $97,000.00, the 20
percentage of federally taxable benefits received under the Social Security Act 21 BILL AS INTRODUCED H.74
2025 Page 8 of 24
VT LEG #379192 v.1
to be excluded shall be proportional to the amount of the taxpayer’s federal 1
adjusted gross income over $77,000.00 $87,000.00, determined by: 2
(i) subtracting the federal adjusted gross income of the taxpayer 3
from $87,000.00 $97,000.00; 4
(ii) dividing the value under subdivision (i) of this subdivision (B) 5
by $10,000.00; and 6
(iii) multiplying the value under subdivision (ii) of this 7
subdivision (B) by the federally taxable benefits received under the Social 8
Security Act. 9
(C) If the federal adjusted gross income of the taxpayer is equal to or 10
greater than $87,000.00 $97,000.00, no amount of the federally taxable 11
benefits received under the Social Security Act shall be excluded under this 12
section. 13
(2) For taxpayers whose filing status is married filing jointly: 14
(A) If the federal adjusted gross income of the taxpayer is less than or 15
equal to $92,000.00 $102,000.00, all federally taxable benefits received under 16
the Social Security Act shall be excluded. 17
(B) If the federal adjusted gross income of the taxpayer is greater 18
than $92,000.00 $102,000.00 but less than $102,000.00 $112,000.00, the 19
percentage of federally taxable benefits received under the Social Security Act 20 BILL AS INTRODUCED H.74
2025 Page 9 of 24
VT LEG #379192 v.1
to be excluded shall be proportional to the amount of the taxpayer’s federal 1
adjusted gross income over $92,000.00 $102,000.00, determined by: 2
(i) subtracting the federal adjusted gross income of the taxpayer 3
from $102,000.00 $112,000.00; 4
(ii) dividing the value under subdivision (i) of this subdivision (B) 5
by $10,000.00; and 6
(iii) multiplying the value under subdivision (ii) of this 7
subdivision (B) by the federally taxable benefits received under the Social 8
Security Act. 9
(C) If the federal adjusted gross income of the taxpayer is equal to or 10
greater than $102,000.00 $112,000.00, no amount of the federally taxable 11
benefits received under the Social Security Act shall be excluded under this 12
section. 13
* * * 14
Sec. 4. 32 V.S.A. § 5830e is amended to read: 15
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 16
(a) Social Security income. The portion of federally taxable Social 17
Security benefits excluded from taxable income under subdivision 18
5811(21)(B)(iv) of this chapter shall be as follows: 19
(1) For taxpayers whose filing status is single, married filing separately, 20
head of household, or surviving spouse: 21 BILL AS INTRODUCED H.74
2025 Page 10 of 24
VT LEG #379192 v.1
(A) If the federal adjusted gross income of the taxpayer is less than or 1
equal to $87,000.00 $97,000.00, all federally taxable benefits received under 2
the federal Social Security Act shall be excluded. 3
(B) If the federal adjusted gross income of the taxpayer is greater 4
than $87,000.00 $97,000.00 but less than $97,000.00 $107,000.00, the 5
percentage of federally taxable benefits received under the Social Security Act 6
to be excluded shall be proportional to the amount of the taxpayer’s federal 7
adjusted gross income over $87,000.00 $97,000.00, determined by: 8
(i) subtracting the federal adjusted gross income of the taxpayer 9
from $97,000.00 $107,000.00; 10
(ii) dividing the value under subdivision (i) of this subdivision (B) 11
by $10,000.00; and 12
(iii) multiplying the value under subdivision (ii) of this 13
subdivision (B) by the federally taxable benefits received under the Social 14
Security Act. 15
(C) If the federal adjusted gross income of the taxpayer is equal to or 16
greater than $97,000.00 $107,000.00, no amount of the federally taxable 17
benefits received under the Social Security Act shall be excluded under this 18
section. 19
(2) For taxpayers whose filing status is married filing jointly: 20 BILL AS INTRODUCED H.74
2025 Page 11 of 24
VT LEG #379192 v.1
(A) If the federal adjusted gross income of the taxpayer is less than or 1
equal to $102,000.00 $112,000.00, all federally taxable benefits received under 2
the Social Security Act shall be excluded. 3
(B) If the federal adjusted gross income of the taxpayer is greater 4
than $102,000.00 $112,000.00 but less than $112,000.00 $122,000.00, the 5
percentage of federally taxable benefits received under the Social Security Act 6
to be excluded shall be proportional to the amount of the taxpayer’s federal 7
adjusted gross income over $102,000.00 $112,000.00, determined by: 8
(i) subtracting the federal adjusted gross income of the taxpayer 9
from $112,000.00 $122,000.00; 10
(ii) dividing the value under subdivision (i) of this subdivision (B) 11
by $10,000.00; and 12
(iii) multiplying the value under subdivision (ii) of this 13
subdivision (B) by the federally taxable benefits received under the Social 14
Security Act. 15
(C) If the federal adjusted gross income of the taxpayer is equal to or 16
greater than $112,000.00 $122,000.00, no amount of the federally taxable 17
benefits received under the Social Security Act shall be excluded under this 18
section. 19
* * * 20 BILL AS INTRODUCED H.74
2025 Page 12 of 24
VT LEG #379192 v.1
Sec. 5. 32 V.S.A. § 5830e is amended to read: 1
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 2
(a) Social Security income. The portion of federally taxable Social 3
Security benefits excluded from taxable income under subdivision 4
5811(21)(B)(iv) of this chapter shall be as follows: 5
(1) For taxpayers whose filing status is single, married filing separately, 6
head of household, or surviving spouse: 7
(A) If the federal adjusted gross income of the taxpayer is less than or 8
equal to $97,000.00 $107,000.00, all federally taxable benefits received under 9
the federal Social Security Act shall be excluded. 10
(B) If the federal adjusted gross income of the taxpayer is greater 11
than $97,000.00 $107,000.00 but less than $107,000.00 $117,000.00, the 12
percentage of federally taxable benefits received under the Social Security Act 13
to be excluded shall be proportional to the amount of the taxpayer’s federal 14
adjusted gross income over $97,000.00 $107,000.00, determined by: 15
(i) subtracting the federal adjusted gross income of the taxpayer 16
from $107,000.00 $117,000.00; 17
(ii) dividing the value under subdivision (i) of this subdivision (B) 18
by $10,000.00; and 19 BILL AS INTRODUCED H.74
2025 Page 13 of 24
VT LEG #379192 v.1
(iii) multiplying the value under subdivision (ii) of this 1
subdivision (B) by the federally taxable benefits received under the Social 2
Security Act. 3
(C) If the federal adjusted gross income of the taxpayer is equal to or 4
greater than $107,000.00 $117,000.00, no amount of the federally taxable 5
benefits received under the Social Security Act shall be excluded under this 6
section. 7
(2) For taxpayers whose filing status is married filing jointly: 8
(A) If the federal adjusted gross income of the taxpayer is less than or 9
equal to $112,000.00 $122,000.00, all federally taxable benefits received under 10
the Social Security Act shall be excluded. 11
(B) If the federal adjusted gross income of the taxpayer is greater 12
than $112,000.00 $122,000.00 but less than $122,000.00 $132,000.00, the 13
percentage of federally taxable benefits received under the Social Security Act 14
to be excluded shall be proportional to the amount of the taxpayer’s federal 15
adjusted gross income over $112,000.00 $122,000.00, determined by: 16
(i) subtracting the federal adjusted gross income of the taxpayer 17
from $122,000.00 $132,000.00; 18
(ii) dividing the value under subdivision (i) of this subdivision (B) 19
by $10,000.00; and 20 BILL AS INTRODUCED H.74
2025 Page 14 of 24
VT LEG #379192 v.1
(iii) multiplying the value under subdivision (ii) of this 1
subdivision (B) by the federally taxable benefits received under the Social 2
Security Act. 3
(C) If the federal adjusted gross income of the taxpayer is equal to or 4
greater than $122,000.00 $132,000.00, no amount of the federally taxable 5
benefits received under the Social Security Act shall be excluded under this 6
section. 7
* * * 8
Sec. 6. 32 V.S.A. § 5830e is amended to read: 9
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 10
(a) Social Security income. The portion of federally taxable Social 11
Security benefits excluded from taxable income under subdivision 12
5811(21)(B)(iv) of this chapter shall be as follows: 13
(1) For taxpayers whose filing status is single, married filing separately, 14
head of household, or surviving spouse: 15
(A) If the federal adjusted gross income of the taxpayer is less than or 16
equal to $107,000.00 $117,000.00, all federally taxable benefits received under 17
the federal Social Security Act shall be excluded. 18
(B) If the federal adjusted gross income of the taxpayer is greater 19
than $107,000.00 $117,000.00 but less than $117,000.00 $127,000.00, the 20
percentage of federally taxable benefits received under the Social Security Act 21 BILL AS INTRODUCED H.74
2025 Page 15 of 24
VT LEG #379192 v.1
to be excluded shall be proportional to the amount of the taxpayer’s federal 1
adjusted gross income over $107,000.00 $117,000.00, determined by: 2
(i) subtracting the federal adjusted gross income of the taxpayer 3
from $117,000.00 $127,000.00; 4
(ii) dividing the value under subdivision (i) of this subdivision (B) 5
by $10,000.00; and 6
(iii) multiplying the value under subdivision (ii) of this 7
subdivision (B) by the federally taxable benefits received under the Social 8
Security Act. 9
(C) If the federal adjusted gross income of the taxpayer is equal to or 10
greater than $117,000.00 $127,000.00, no amount of the federally taxable 11
benefits received under the Social Security Act shall be excluded under this 12
section. 13
(2) For taxpayers whose filing status is married filing jointly: 14
(A) If the federal adjusted gross income of the taxpayer is less than or 15
equal to $122,000.00 $132,000.00, all federally taxable benefits received under 16
the Social Security Act shall be excluded. 17
(B) If the federal adjusted gross income of the taxpayer is greater 18
than $122,000.00 $132,000.00 but less than $132,000.00 $142,000.00, the 19
percentage of federally taxable benefits received under the Social Security Act 20 BILL AS INTRODUCED H.74
2025 Page 16 of 24
VT LEG #379192 v.1
to be excluded shall be proportional to the amount of the taxpayer’s federal 1
adjusted gross income over $122,000.00 $132,000.00, determined by: 2
(i) subtracting the federal adjusted gross income of the taxpayer 3
from $132,000.00 $142,000.00; 4
(ii) dividing the value under subdivision (i) of this subdivision (B) 5
by $10,000.00; and 6
(iii) multiplying the value under subdivision (ii) of this 7
subdivision (B) by the federally taxable benefits received under the Social 8
Security Act. 9
(C) If the federal adjusted gross income of the taxpayer is equal to or 10
greater than $132,000.00 $142,000.00, no amount of the federally taxable 11
benefits received under the Social Security Act shall be excluded under this 12
section. 13
* * * 14
Sec. 7. 32 V.S.A. § 5830e is amended to read: 15
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 16
(a) Social Security income. The portion of federally taxable Social 17
Security benefits excluded from taxable income under subdivision 18
5811(21)(B)(iv) of this chapter shall be as follows: 19
(1) For taxpayers whose filing status is single, married filing separately, 20
head of household, or surviving spouse: 21 BILL AS INTRODUCED H.74
2025 Page 17 of 24
VT LEG #379192 v.1
(A) If the federal adjusted gross income of the taxpayer is less than or 1
equal to $117,000.00 $127,000.00, all federally taxable benefits received under 2
the federal Social Security Act shall be excluded. 3
(B) If the federal adjusted gross income of the taxpayer is greater 4
than $117,000.00 $127,000.00 but less than $127,000.00 $137,000.00, the 5
percentage of federally taxable benefits received under the Social Security Act 6
to be excluded shall be proportional to the amount of the taxpayer’s federal 7
adjusted gross income over $117,000.00 $127,000.00, determined by: 8
(i) subtracting the federal adjusted gross income of the taxpayer 9
from $127,000.00 $137,000.00; 10
(ii) dividing the value under subdivision (i) of this subdivision (B) 11
by $10,000.00; and 12
(iii) multiplying the value under subdivision (ii) of this 13
subdivision (B) by the federally taxable benefits received under the Social 14
Security Act. 15
(C) If the federal adjusted gross income of the taxpayer is equal to or 16
greater than $127,000.00 $137,000.00, no amount of the federally taxable 17
benefits received under the Social Security Act shall be excluded under this 18
section. 19
(2) For taxpayers whose filing status is married filing jointly: 20 BILL AS INTRODUCED H.74
2025 Page 18 of 24
VT LEG #379192 v.1
(A) If the federal adjusted gross income of the taxpayer is less than or 1
equal to $132,000.00 $142,000.00, all federally taxable benefits received under 2
the Social Security Act shall be excluded. 3
(B) If the federal adjusted gross income of the taxpayer is greater 4
than $132,000.00 $142,000.00 but less than $142,000.00 $152,000.00, the 5
percentage of federally taxable benefits received under the Social Security Act 6
to be excluded shall be proportional to the amount of the taxpayer’s federal 7
adjusted gross income over $132,000.00 $142,000.00, determined by: 8
(i) subtracting the federal adjusted gross income of the taxpayer 9
from $142,000.00 $152,000.00; 10
(ii) dividing the value under subdivision (i) of this subdivision (B) 11
by $10,000.00; and 12
(iii) multiplying the value under subdivision (ii) of this 13
subdivision (B) by the federally taxable benefits received under the Social 14
Security Act. 15
(C) If the federal adjusted gross income of the taxpayer is equal to or 16
greater than $142,000.00 $152,000.00, no amount of the federally taxable 17
benefits received under the Social Security Act shall be excluded under this 18
section. 19
* * * 20 BILL AS INTRODUCED H.74
2025 Page 19 of 24
VT LEG #379192 v.1
Sec. 8. 32 V.S.A. § 5830e is amended to read: 1
§ 5830e. RETIREMENT INCOME ; SOCIAL SECURITY INCOME 2
(a) Social Security income. The portion of federally taxable Social 3
Security benefits excluded from taxable income under subdivision 4
5811(21)(B)(iv) of this chapter shall be as follows: 5
(1) For taxpayers whose filing status is single, married filing separately, 6
head of household, or surviving spouse: 7
(A) If the federal adjusted gross income of the taxpayer is less than or 8
equal to $127,000.00, all federally taxable benefits received under the federal 9
Social Security Act shall be excluded. 10
(B) If the federal adjusted gross income of the taxpayer is greater 11
than $127,000.00 but less than $137,000.00, the percentage of federally taxable 12
benefits received under the Social Security Act to be excluded shall be 13
proportional to the amount of the taxpayer’s federal adjusted gross income 14
over $127,000.00, determined by: 15
(i) subtracting the federal adjusted gross income of the taxpayer 16
from $137,000.00; 17
(ii) dividing the value under subdivision (i) of this subdivision (B) 18
by $10,000.00; and 19 BILL AS INTRODUCED H.74
2025 Page 20 of 24
VT LEG #379192 v.1
(iii) multiplying the value under subdivision (ii) of this 1
subdivision (B) by the federally taxable benefits received under the Social 2
Security Act. 3
(C) If the federal adjusted gross income of the taxpayer is equal to or 4
greater than $137,000.00, no amount of the federally taxable benefits received 5
under the Social Security Act shall be excluded under this section. 6
(2) For taxpayers whose filing status is married filing jointly: 7
(A) If the federal adjusted gross income of the taxpayer is less than or 8
equal to $142,000.00, all federally taxable benefits received under the Social 9
Security Act shall be excluded. 10
(B) If the federal adjusted gross income of the taxpayer is greater 11
than $142,000.00 but less than $152,000.00, the percentage of federally taxable 12
benefits received under the Social Security Act to be excluded shall be 13
proportional to the amount of the taxpayer’s federal adjusted gross income 14
over $142,000.00, determined by: 15
(i) subtracting the federal adjusted gross income of the taxpayer 16
from $152,000.00; 17
(ii) dividing the value under subdivision (i) of this subdivision (B) 18
by $10,000.00; and 19 BILL AS INTRODUCED H.74
2025 Page 21 of 24
VT LEG #379192 v.1
(iii) multiplying the value under subdivision (ii) of this 1
subdivision (B) by the federally taxable benefits received under the Social 2
Security Act. 3
(C) If the federal adjusted gross income of the taxpayer is equal to or 4
greater than $152,000.00, no amount of the federally taxable benefits received 5
under the Social Security Act shall be excluded under this section. [Repealed.] 6
* * * 7
(e) Requirement to elect one exclusion. A taxpayer of this State who is 8
eligible during the taxable year for the Social Security income exclusion under 9
subsection (a) of this section and any of the exclusions under subsections (b)–10
(d) of this section shall elect either one of the exclusions for which the 11
taxpayer is eligible under subsections (b)–(d) of this section or the Social 12
Security income exclusion under subsection (a) of this section, but not both, 13
for the taxable year. A taxpayer of this State who is eligible during the taxable 14
year for more than one of the exclusions under subsections (b)–(d) of this 15
section shall elect only one of the exclusions for which the taxpayer is eligible 16
for the taxable year. 17
Sec. 9. 32 V.S.A. § 5811 is amended to read: 18
§ 5811. DEFINITIONS 19
As used in this chapter unless the context requires otherwise: 20
* * * 21 BILL AS INTRODUCED H.74
2025 Page 22 of 24
VT LEG #379192 v.1
(21) “Taxable income” means, in the case of an individual, federal 1
adjusted gross income determined without regard to 26 U.S.C. § 168(k) and: 2
* * * 3
(B) decreased by the following items of income (to the extent such 4
income is included in federal adjusted gross income): 5
* * * 6
(iv) the portion of certain retirement income and federally taxable 7
benefits received under the federal Social Security Act that is required to be 8
excluded under section 5830e of this chapter and all federally taxable benefits 9
received under the Social Security Act; 10
* * * 11
Sec. 10. 32 V.S.A. § 5813 is amended to read: 12
§ 5813. STATUTORY PURPOSES 13
* * * 14
(w) The statutory purpose of the partial exemption of federally taxable 15
benefits under the Social Security Act and certain retirement income in section 16
5830e of this title is to lessen the tax burden on Vermonters with low to 17
moderate income who derive part of their income from Social Security benefits 18
and certain retirement income. 19
* * * 20 BILL AS INTRODUCED H.74
2025 Page 23 of 24
VT LEG #379192 v.1
(aa) The statutory purpose of the exemption of all federally taxable benefits 1
under the Social Security Act in subdivision 5811(21)(B)(iv) of this title is to 2
lessen the tax burden on Vermonters who derive part of their income from 3
Social Security benefits. 4
Sec. 11. EFFECTIVE DATES 5
(a) Notwithstanding 1 V.S.A. § 214, Sec. 1 and this section shall take effect 6
retroactively on January 1, 2025 and apply to taxable years on and after 7
January 1, 2025. 8
(b) Sec. 2 shall take effect on January 1, 2026 and apply to taxable years on 9
and after January 1, 2026. 10
(c) Sec. 3 shall take effect on January 1, 2027 and apply to taxable years on 11
and after January 1, 2027. 12
(d) Sec. 4 shall take effect on January 1, 2028 and apply to taxable years on 13
and after January 1, 2028. 14
(e) Sec. 5 shall take effect on January 1, 2029 and apply to taxable years on 15
and after January 1, 2029. 16
(f) Sec. 6 shall take effect on January 1, 2030 and apply to taxable years on 17
and after January 1, 2030. 18
(g) Sec. 7 shall take effect on January 1, 2031 and apply to taxable years on 19
and after January 1, 2031. 20 BILL AS INTRODUCED H.74
2025 Page 24 of 24
VT LEG #379192 v.1
(h) Secs. 8–10 shall take effect on January 1, 2032 and apply to taxable 1
years on and after January 1, 2032. 2