Vermont 2025-2026 Regular Session

Vermont House Bill H0074 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	BILL AS INTRODUCED H.74
2	2	2025 Page 1 of 24
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5	5	VT LEG #379192 v.1
6	6	H.74 1
7	7	Introduced by Representatives Harrison of Chittenden, Noyes of Wolcott, 2
8	8	Bailey of Hyde Park, Bartley of Fairfax, Birong of Vergennes, 3
9	9	Bosch of Clarendon, Boyden of Cambridge, Burditt of West 4
10	10	Rutland, Burrows of West Windsor, Burtt of Cabot, Casey of 5
11	11	Hubbardton, Christie of Hartford, Coffin of Cavendish, Cooper 6
12	12	of Pownal, Demar of Enosburgh, Dickinson of St. Albans 7
13	13	Town, Dobrovich of Williamstown, Galfetti of Barre Town, 8
14	14	Greer of Bennington, Gregoire of Fairfield, Hango of Berkshire, 9
15	15	Harple of Glover, Harvey of Castleton, Headrick of Burlington, 10
16	16	Higley of Lowell, Howard of Rutland City, Howland of Rutland 11
17	17	Town, Kascenska of Burke, Keyser of Rutland City, Krasnow 12
18	18	of South Burlington, Labor of Morgan, Laroche of Franklin, 13
19	19	Luneau of St. Albans City, Maguire of Rutland City, Malay of 14
20	20	Pittsford, Marcotte of Coventry, McCoy of Poultney, McFaun 15
21	21	of Barre Town, McGill of Bridport, Micklus of Milton, Morgan, 16
22	22	L. of Milton, Morgan, M. of Milton, Morris of Springfield, 17
23	23	Morrissey of Bennington, Morrow of Weston, Nielsen of 18
24	24	Brandon, North of Ferrisburgh, Ode of Burlington, Page of 19
25	25	Newport City, Pinsonault of Dorset, Priestley of Bradford, 20
26	26	Pritchard of Pawlet, Southworth of Walden, Surprenant of 21 BILL AS INTRODUCED H.74
27	27	2025 Page 2 of 24
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29	29
30	30	VT LEG #379192 v.1
31	31	Barnard, Tagliavia of Corinth, Taylor of Milton, Toof of St. 1
32	32	Albans Town, Waszazak of Barre City, Wells of Brownington, 2
33	33	White of Bethel, Winter of Ludlow, and Wood of Waterbury 3
34	34	Referred to Committee on 4
35	35	Date: 5
36	36	Subject: Taxation; income tax; Social Security benefits; tax exemption 6
37	37	Statement of purpose of bill as introduced: This bill proposes to phase in a full 7
38	38	income tax exemption for Social Security benefits over eight years. The 8
39	39	existing partial exemption exempts a larger portion of Social Security benefits 9
40	40	each year for seven years and Social Security benefits become fully exempt in 10
41	41	the eighth year. 11
42	42	An act relating to exempting Social Security benefits from Vermont income 12
43	43	tax 13
44	44	It is hereby enacted by the General Assembly of the State of Vermont: 14
45	45	Sec. 1. 32 V.S.A. § 5830e is amended to read: 15
46	46	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 16
47	47	(a) Social Security income. The portion of federally taxable Social 17
48	48	Security benefits excluded from taxable income under subdivision 18
49	49	5811(21)(B)(iv) of this chapter shall be as follows: 19 BILL AS INTRODUCED H.74
50	50	2025 Page 3 of 24
51	51
52	52
53	53	VT LEG #379192 v.1
54	54	(1) For taxpayers whose filing status is single, married filing separately, 1
55	55	head of household, or surviving spouse: 2
56	56	(A) If the federal adjusted gross income of the taxpayer is less than or 3
57	57	equal to $50,000.00 $65,000.00, all federally taxable benefits received under 4
58	58	the federal Social Security Act shall be excluded. 5
59	59	(B) If the federal adjusted gross income of the taxpayer is greater 6
60	60	than $50,000.00 $65,000.00 but less than $60,000.00 $75,000.00, the 7
61	61	percentage of federally taxable benefits received under the Social Security Act 8
62	62	to be excluded shall be proportional to the amount of the taxpayer’s federal 9
63	63	adjusted gross income over $50,000.00 $65,000.00, determined by: 10
64	64	(i) subtracting the federal adjusted gross income of the taxpayer 11
65	65	from $60,000.00 $75,000.00; 12
66	66	(ii) dividing the value under subdivision (i) of this subdivision (B) 13
67	67	by $10,000.00; and 14
68	68	(iii) multiplying the value under subdivision (ii) of this 15
69	69	subdivision (B) by the federally taxable benefits received under the Social 16
70	70	Security Act. 17
71	71	(C) If the federal adjusted gross income of the taxpayer is equal to or 18
72	72	greater than $60,000.00 $75,000.00, no amount of the federally taxable 19
73	73	benefits received under the Social Security Act shall be excluded under this 20
74	74	section. 21 BILL AS INTRODUCED H.74
75	75	2025 Page 4 of 24
76	76
77	77
78	78	VT LEG #379192 v.1
79	79	(2) For taxpayers whose filing status is married filing jointly: 1
80	80	(A) If the federal adjusted gross income of the taxpayer is less than or 2
81	81	equal to $65,000.00 $80,000.00, all federally taxable benefits received under 3
82	82	the Social Security Act shall be excluded. 4
83	83	(B) If the federal adjusted gross income of the taxpayer is greater 5
84	84	than $65,000.00 $80,000.00 but less than $75,000.00 $90,000.00, the 6
85	85	percentage of federally taxable benefits received under the Social Security Act 7
86	86	to be excluded shall be proportional to the amount of the taxpayer’s federal 8
87	87	adjusted gross income over $65,000.00 $80,000.00, determined by: 9
88	88	(i) subtracting the federal adjusted gross income of the taxpayer 10
89	89	from $75,000.00 $90,000.00; 11
90	90	(ii) dividing the value under subdivision (i) of this subdivision (B) 12
91	91	by $10,000.00; and 13
92	92	(iii) multiplying the value under subdivision (ii) of this 14
93	93	subdivision (B) by the federally taxable benefits received under the Social 15
94	94	Security Act. 16
95	95	(C) If the federal adjusted gross income of the taxpayer is equal to or 17
96	96	greater than $75,000.00 $90,000.00, no amount of the federally taxable 18
97	97	benefits received under the Social Security Act shall be excluded under this 19
98	98	section. 20
99	99	* * * 21 BILL AS INTRODUCED H.74
100	100	2025 Page 5 of 24
101	101
102	102
103	103	VT LEG #379192 v.1
104	104	Sec. 2. 32 V.S.A. § 5830e is amended to read: 1
105	105	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 2
106	106	(a) Social Security income. The portion of federally taxable Social 3
107	107	Security benefits excluded from taxable income under subdivision 4
108	108	5811(21)(B)(iv) of this chapter shall be as follows: 5
109	109	(1) For taxpayers whose filing status is single, married filing separately, 6
110	110	head of household, or surviving spouse: 7
111	111	(A) If the federal adjusted gross income of the taxpayer is less than or 8
112	112	equal to $65,000.00 $77,000.00, all federally taxable benefits received under 9
113	113	the federal Social Security Act shall be excluded. 10
114	114	(B) If the federal adjusted gross income of the taxpayer is greater 11
115	115	than $65,000.00 $77,000.00 but less than $75,000.00 $87,000.00, the 12
116	116	percentage of federally taxable benefits received under the Social Security Act 13
117	117	to be excluded shall be proportional to the amount of the taxpayer’s federal 14
118	118	adjusted gross income over $65,000.00 $77,000.00, determined by: 15
119	119	(i) subtracting the federal adjusted gross income of the taxpayer 16
120	120	from $75,000.00 $87,000.00; 17
121	121	(ii) dividing the value under subdivision (i) of this subdivision (B) 18
122	122	by $10,000.00; and 19 BILL AS INTRODUCED H.74
123	123	2025 Page 6 of 24
124	124
125	125
126	126	VT LEG #379192 v.1
127	127	(iii) multiplying the value under subdivision (ii) of this 1
128	128	subdivision (B) by the federally taxable benefits received under the Social 2
129	129	Security Act. 3
130	130	(C) If the federal adjusted gross income of the taxpayer is equal to or 4
131	131	greater than $75,000.00 $87,000.00, no amount of the federally taxable 5
132	132	benefits received under the Social Security Act shall be excluded under this 6
133	133	section. 7
134	134	(2) For taxpayers whose filing status is married filing jointly: 8
135	135	(A) If the federal adjusted gross income of the taxpayer is less than or 9
136	136	equal to $80,000.00 $92,000.00, all federally taxable benefits received under 10
137	137	the Social Security Act shall be excluded. 11
138	138	(B) If the federal adjusted gross income of the taxpayer is greater 12
139	139	than $80,000.00 $92,000.00 but less than $90,000.00 $102,000.00, the 13
140	140	percentage of federally taxable benefits received under the Social Security Act 14
141	141	to be excluded shall be proportional to the amount of the taxpayer’s federal 15
142	142	adjusted gross income over $80,000.00 $92,000.00, determined by: 16
143	143	(i) subtracting the federal adjusted gross income of the taxpayer 17
144	144	from $90,000.00 $102,000.00; 18
145	145	(ii) dividing the value under subdivision (i) of this subdivision (B) 19
146	146	by $10,000.00; and 20 BILL AS INTRODUCED H.74
147	147	2025 Page 7 of 24
148	148
149	149
150	150	VT LEG #379192 v.1
151	151	(iii) multiplying the value under subdivision (ii) of this 1
152	152	subdivision (B) by the federally taxable benefits received under the Social 2
153	153	Security Act. 3
154	154	(C) If the federal adjusted gross income of the taxpayer is equal to or 4
155	155	greater than $90,000.00 $102,000.00, no amount of the federally taxable 5
156	156	benefits received under the Social Security Act shall be excluded under this 6
157	157	section. 7
158	158	* * * 8
159	159	Sec. 3. 32 V.S.A. § 5830e is amended to read: 9
160	160	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 10
161	161	(a) Social Security income. The portion of federally taxable Social 11
162	162	Security benefits excluded from taxable income under subdivision 12
163	163	5811(21)(B)(iv) of this chapter shall be as follows: 13
164	164	(1) For taxpayers whose filing status is single, married filing separately, 14
165	165	head of household, or surviving spouse: 15
166	166	(A) If the federal adjusted gross income of the taxpayer is less than or 16
167	167	equal to $77,000.00 $87,000.00, all federally taxable benefits received under 17
168	168	the federal Social Security Act shall be excluded. 18
169	169	(B) If the federal adjusted gross income of the taxpayer is greater 19
170	170	than $77,000.00 $87,000.00 but less than $87,000.00 $97,000.00, the 20
171	171	percentage of federally taxable benefits received under the Social Security Act 21 BILL AS INTRODUCED H.74
172	172	2025 Page 8 of 24
173	173
174	174
175	175	VT LEG #379192 v.1
176	176	to be excluded shall be proportional to the amount of the taxpayer’s federal 1
177	177	adjusted gross income over $77,000.00 $87,000.00, determined by: 2
178	178	(i) subtracting the federal adjusted gross income of the taxpayer 3
179	179	from $87,000.00 $97,000.00; 4
180	180	(ii) dividing the value under subdivision (i) of this subdivision (B) 5
181	181	by $10,000.00; and 6
182	182	(iii) multiplying the value under subdivision (ii) of this 7
183	183	subdivision (B) by the federally taxable benefits received under the Social 8
184	184	Security Act. 9
185	185	(C) If the federal adjusted gross income of the taxpayer is equal to or 10
186	186	greater than $87,000.00 $97,000.00, no amount of the federally taxable 11
187	187	benefits received under the Social Security Act shall be excluded under this 12
188	188	section. 13
189	189	(2) For taxpayers whose filing status is married filing jointly: 14
190	190	(A) If the federal adjusted gross income of the taxpayer is less than or 15
191	191	equal to $92,000.00 $102,000.00, all federally taxable benefits received under 16
192	192	the Social Security Act shall be excluded. 17
193	193	(B) If the federal adjusted gross income of the taxpayer is greater 18
194	194	than $92,000.00 $102,000.00 but less than $102,000.00 $112,000.00, the 19
195	195	percentage of federally taxable benefits received under the Social Security Act 20 BILL AS INTRODUCED H.74
196	196	2025 Page 9 of 24
197	197
198	198
199	199	VT LEG #379192 v.1
200	200	to be excluded shall be proportional to the amount of the taxpayer’s federal 1
201	201	adjusted gross income over $92,000.00 $102,000.00, determined by: 2
202	202	(i) subtracting the federal adjusted gross income of the taxpayer 3
203	203	from $102,000.00 $112,000.00; 4
204	204	(ii) dividing the value under subdivision (i) of this subdivision (B) 5
205	205	by $10,000.00; and 6
206	206	(iii) multiplying the value under subdivision (ii) of this 7
207	207	subdivision (B) by the federally taxable benefits received under the Social 8
208	208	Security Act. 9
209	209	(C) If the federal adjusted gross income of the taxpayer is equal to or 10
210	210	greater than $102,000.00 $112,000.00, no amount of the federally taxable 11
211	211	benefits received under the Social Security Act shall be excluded under this 12
212	212	section. 13
213	213	* * * 14
214	214	Sec. 4. 32 V.S.A. § 5830e is amended to read: 15
215	215	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 16
216	216	(a) Social Security income. The portion of federally taxable Social 17
217	217	Security benefits excluded from taxable income under subdivision 18
218	218	5811(21)(B)(iv) of this chapter shall be as follows: 19
219	219	(1) For taxpayers whose filing status is single, married filing separately, 20
220	220	head of household, or surviving spouse: 21 BILL AS INTRODUCED H.74
221	221	2025 Page 10 of 24
222	222
223	223
224	224	VT LEG #379192 v.1
225	225	(A) If the federal adjusted gross income of the taxpayer is less than or 1
226	226	equal to $87,000.00 $97,000.00, all federally taxable benefits received under 2
227	227	the federal Social Security Act shall be excluded. 3
228	228	(B) If the federal adjusted gross income of the taxpayer is greater 4
229	229	than $87,000.00 $97,000.00 but less than $97,000.00 $107,000.00, the 5
230	230	percentage of federally taxable benefits received under the Social Security Act 6
231	231	to be excluded shall be proportional to the amount of the taxpayer’s federal 7
232	232	adjusted gross income over $87,000.00 $97,000.00, determined by: 8
233	233	(i) subtracting the federal adjusted gross income of the taxpayer 9
234	234	from $97,000.00 $107,000.00; 10
235	235	(ii) dividing the value under subdivision (i) of this subdivision (B) 11
236	236	by $10,000.00; and 12
237	237	(iii) multiplying the value under subdivision (ii) of this 13
238	238	subdivision (B) by the federally taxable benefits received under the Social 14
239	239	Security Act. 15
240	240	(C) If the federal adjusted gross income of the taxpayer is equal to or 16
241	241	greater than $97,000.00 $107,000.00, no amount of the federally taxable 17
242	242	benefits received under the Social Security Act shall be excluded under this 18
243	243	section. 19
244	244	(2) For taxpayers whose filing status is married filing jointly: 20 BILL AS INTRODUCED H.74
245	245	2025 Page 11 of 24
246	246
247	247
248	248	VT LEG #379192 v.1
249	249	(A) If the federal adjusted gross income of the taxpayer is less than or 1
250	250	equal to $102,000.00 $112,000.00, all federally taxable benefits received under 2
251	251	the Social Security Act shall be excluded. 3
252	252	(B) If the federal adjusted gross income of the taxpayer is greater 4
253	253	than $102,000.00 $112,000.00 but less than $112,000.00 $122,000.00, the 5
254	254	percentage of federally taxable benefits received under the Social Security Act 6
255	255	to be excluded shall be proportional to the amount of the taxpayer’s federal 7
256	256	adjusted gross income over $102,000.00 $112,000.00, determined by: 8
257	257	(i) subtracting the federal adjusted gross income of the taxpayer 9
258	258	from $112,000.00 $122,000.00; 10
259	259	(ii) dividing the value under subdivision (i) of this subdivision (B) 11
260	260	by $10,000.00; and 12
261	261	(iii) multiplying the value under subdivision (ii) of this 13
262	262	subdivision (B) by the federally taxable benefits received under the Social 14
263	263	Security Act. 15
264	264	(C) If the federal adjusted gross income of the taxpayer is equal to or 16
265	265	greater than $112,000.00 $122,000.00, no amount of the federally taxable 17
266	266	benefits received under the Social Security Act shall be excluded under this 18
267	267	section. 19
268	268	* * * 20 BILL AS INTRODUCED H.74
269	269	2025 Page 12 of 24
270	270
271	271
272	272	VT LEG #379192 v.1
273	273	Sec. 5. 32 V.S.A. § 5830e is amended to read: 1
274	274	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 2
275	275	(a) Social Security income. The portion of federally taxable Social 3
276	276	Security benefits excluded from taxable income under subdivision 4
277	277	5811(21)(B)(iv) of this chapter shall be as follows: 5
278	278	(1) For taxpayers whose filing status is single, married filing separately, 6
279	279	head of household, or surviving spouse: 7
280	280	(A) If the federal adjusted gross income of the taxpayer is less than or 8
281	281	equal to $97,000.00 $107,000.00, all federally taxable benefits received under 9
282	282	the federal Social Security Act shall be excluded. 10
283	283	(B) If the federal adjusted gross income of the taxpayer is greater 11
284	284	than $97,000.00 $107,000.00 but less than $107,000.00 $117,000.00, the 12
285	285	percentage of federally taxable benefits received under the Social Security Act 13
286	286	to be excluded shall be proportional to the amount of the taxpayer’s federal 14
287	287	adjusted gross income over $97,000.00 $107,000.00, determined by: 15
288	288	(i) subtracting the federal adjusted gross income of the taxpayer 16
289	289	from $107,000.00 $117,000.00; 17
290	290	(ii) dividing the value under subdivision (i) of this subdivision (B) 18
291	291	by $10,000.00; and 19 BILL AS INTRODUCED H.74
292	292	2025 Page 13 of 24
293	293
294	294
295	295	VT LEG #379192 v.1
296	296	(iii) multiplying the value under subdivision (ii) of this 1
297	297	subdivision (B) by the federally taxable benefits received under the Social 2
298	298	Security Act. 3
299	299	(C) If the federal adjusted gross income of the taxpayer is equal to or 4
300	300	greater than $107,000.00 $117,000.00, no amount of the federally taxable 5
301	301	benefits received under the Social Security Act shall be excluded under this 6
302	302	section. 7
303	303	(2) For taxpayers whose filing status is married filing jointly: 8
304	304	(A) If the federal adjusted gross income of the taxpayer is less than or 9
305	305	equal to $112,000.00 $122,000.00, all federally taxable benefits received under 10
306	306	the Social Security Act shall be excluded. 11
307	307	(B) If the federal adjusted gross income of the taxpayer is greater 12
308	308	than $112,000.00 $122,000.00 but less than $122,000.00 $132,000.00, the 13
309	309	percentage of federally taxable benefits received under the Social Security Act 14
310	310	to be excluded shall be proportional to the amount of the taxpayer’s federal 15
311	311	adjusted gross income over $112,000.00 $122,000.00, determined by: 16
312	312	(i) subtracting the federal adjusted gross income of the taxpayer 17
313	313	from $122,000.00 $132,000.00; 18
314	314	(ii) dividing the value under subdivision (i) of this subdivision (B) 19
315	315	by $10,000.00; and 20 BILL AS INTRODUCED H.74
316	316	2025 Page 14 of 24
317	317
318	318
319	319	VT LEG #379192 v.1
320	320	(iii) multiplying the value under subdivision (ii) of this 1
321	321	subdivision (B) by the federally taxable benefits received under the Social 2
322	322	Security Act. 3
323	323	(C) If the federal adjusted gross income of the taxpayer is equal to or 4
324	324	greater than $122,000.00 $132,000.00, no amount of the federally taxable 5
325	325	benefits received under the Social Security Act shall be excluded under this 6
326	326	section. 7
327	327	* * * 8
328	328	Sec. 6. 32 V.S.A. § 5830e is amended to read: 9
329	329	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 10
330	330	(a) Social Security income. The portion of federally taxable Social 11
331	331	Security benefits excluded from taxable income under subdivision 12
332	332	5811(21)(B)(iv) of this chapter shall be as follows: 13
333	333	(1) For taxpayers whose filing status is single, married filing separately, 14
334	334	head of household, or surviving spouse: 15
335	335	(A) If the federal adjusted gross income of the taxpayer is less than or 16
336	336	equal to $107,000.00 $117,000.00, all federally taxable benefits received under 17
337	337	the federal Social Security Act shall be excluded. 18
338	338	(B) If the federal adjusted gross income of the taxpayer is greater 19
339	339	than $107,000.00 $117,000.00 but less than $117,000.00 $127,000.00, the 20
340	340	percentage of federally taxable benefits received under the Social Security Act 21 BILL AS INTRODUCED H.74
341	341	2025 Page 15 of 24
342	342
343	343
344	344	VT LEG #379192 v.1
345	345	to be excluded shall be proportional to the amount of the taxpayer’s federal 1
346	346	adjusted gross income over $107,000.00 $117,000.00, determined by: 2
347	347	(i) subtracting the federal adjusted gross income of the taxpayer 3
348	348	from $117,000.00 $127,000.00; 4
349	349	(ii) dividing the value under subdivision (i) of this subdivision (B) 5
350	350	by $10,000.00; and 6
351	351	(iii) multiplying the value under subdivision (ii) of this 7
352	352	subdivision (B) by the federally taxable benefits received under the Social 8
353	353	Security Act. 9
354	354	(C) If the federal adjusted gross income of the taxpayer is equal to or 10
355	355	greater than $117,000.00 $127,000.00, no amount of the federally taxable 11
356	356	benefits received under the Social Security Act shall be excluded under this 12
357	357	section. 13
358	358	(2) For taxpayers whose filing status is married filing jointly: 14
359	359	(A) If the federal adjusted gross income of the taxpayer is less than or 15
360	360	equal to $122,000.00 $132,000.00, all federally taxable benefits received under 16
361	361	the Social Security Act shall be excluded. 17
362	362	(B) If the federal adjusted gross income of the taxpayer is greater 18
363	363	than $122,000.00 $132,000.00 but less than $132,000.00 $142,000.00, the 19
364	364	percentage of federally taxable benefits received under the Social Security Act 20 BILL AS INTRODUCED H.74
365	365	2025 Page 16 of 24
366	366
367	367
368	368	VT LEG #379192 v.1
369	369	to be excluded shall be proportional to the amount of the taxpayer’s federal 1
370	370	adjusted gross income over $122,000.00 $132,000.00, determined by: 2
371	371	(i) subtracting the federal adjusted gross income of the taxpayer 3
372	372	from $132,000.00 $142,000.00; 4
373	373	(ii) dividing the value under subdivision (i) of this subdivision (B) 5
374	374	by $10,000.00; and 6
375	375	(iii) multiplying the value under subdivision (ii) of this 7
376	376	subdivision (B) by the federally taxable benefits received under the Social 8
377	377	Security Act. 9
378	378	(C) If the federal adjusted gross income of the taxpayer is equal to or 10
379	379	greater than $132,000.00 $142,000.00, no amount of the federally taxable 11
380	380	benefits received under the Social Security Act shall be excluded under this 12
381	381	section. 13
382	382	* * * 14
383	383	Sec. 7. 32 V.S.A. § 5830e is amended to read: 15
384	384	§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 16
385	385	(a) Social Security income. The portion of federally taxable Social 17
386	386	Security benefits excluded from taxable income under subdivision 18
387	387	5811(21)(B)(iv) of this chapter shall be as follows: 19
388	388	(1) For taxpayers whose filing status is single, married filing separately, 20
389	389	head of household, or surviving spouse: 21 BILL AS INTRODUCED H.74
390	390	2025 Page 17 of 24
391	391
392	392
393	393	VT LEG #379192 v.1
394	394	(A) If the federal adjusted gross income of the taxpayer is less than or 1
395	395	equal to $117,000.00 $127,000.00, all federally taxable benefits received under 2
396	396	the federal Social Security Act shall be excluded. 3
397	397	(B) If the federal adjusted gross income of the taxpayer is greater 4
398	398	than $117,000.00 $127,000.00 but less than $127,000.00 $137,000.00, the 5
399	399	percentage of federally taxable benefits received under the Social Security Act 6
400	400	to be excluded shall be proportional to the amount of the taxpayer’s federal 7
401	401	adjusted gross income over $117,000.00 $127,000.00, determined by: 8
402	402	(i) subtracting the federal adjusted gross income of the taxpayer 9
403	403	from $127,000.00 $137,000.00; 10
404	404	(ii) dividing the value under subdivision (i) of this subdivision (B) 11
405	405	by $10,000.00; and 12
406	406	(iii) multiplying the value under subdivision (ii) of this 13
407	407	subdivision (B) by the federally taxable benefits received under the Social 14
408	408	Security Act. 15
409	409	(C) If the federal adjusted gross income of the taxpayer is equal to or 16
410	410	greater than $127,000.00 $137,000.00, no amount of the federally taxable 17
411	411	benefits received under the Social Security Act shall be excluded under this 18
412	412	section. 19
413	413	(2) For taxpayers whose filing status is married filing jointly: 20 BILL AS INTRODUCED H.74
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415	415
416	416
417	417	VT LEG #379192 v.1
418	418	(A) If the federal adjusted gross income of the taxpayer is less than or 1
419	419	equal to $132,000.00 $142,000.00, all federally taxable benefits received under 2
420	420	the Social Security Act shall be excluded. 3
421	421	(B) If the federal adjusted gross income of the taxpayer is greater 4
422	422	than $132,000.00 $142,000.00 but less than $142,000.00 $152,000.00, the 5
423	423	percentage of federally taxable benefits received under the Social Security Act 6
424	424	to be excluded shall be proportional to the amount of the taxpayer’s federal 7
425	425	adjusted gross income over $132,000.00 $142,000.00, determined by: 8
426	426	(i) subtracting the federal adjusted gross income of the taxpayer 9
427	427	from $142,000.00 $152,000.00; 10
428	428	(ii) dividing the value under subdivision (i) of this subdivision (B) 11
429	429	by $10,000.00; and 12
430	430	(iii) multiplying the value under subdivision (ii) of this 13
431	431	subdivision (B) by the federally taxable benefits received under the Social 14
432	432	Security Act. 15
433	433	(C) If the federal adjusted gross income of the taxpayer is equal to or 16
434	434	greater than $142,000.00 $152,000.00, no amount of the federally taxable 17
435	435	benefits received under the Social Security Act shall be excluded under this 18
436	436	section. 19
437	437	* * * 20 BILL AS INTRODUCED H.74
438	438	2025 Page 19 of 24
439	439
440	440
441	441	VT LEG #379192 v.1
442	442	Sec. 8. 32 V.S.A. § 5830e is amended to read: 1
443	443	§ 5830e. RETIREMENT INCOME ; SOCIAL SECURITY INCOME 2
444	444	(a) Social Security income. The portion of federally taxable Social 3
445	445	Security benefits excluded from taxable income under subdivision 4
446	446	5811(21)(B)(iv) of this chapter shall be as follows: 5
447	447	(1) For taxpayers whose filing status is single, married filing separately, 6
448	448	head of household, or surviving spouse: 7
449	449	(A) If the federal adjusted gross income of the taxpayer is less than or 8
450	450	equal to $127,000.00, all federally taxable benefits received under the federal 9
451	451	Social Security Act shall be excluded. 10
452	452	(B) If the federal adjusted gross income of the taxpayer is greater 11
453	453	than $127,000.00 but less than $137,000.00, the percentage of federally taxable 12
454	454	benefits received under the Social Security Act to be excluded shall be 13
455	455	proportional to the amount of the taxpayer’s federal adjusted gross income 14
456	456	over $127,000.00, determined by: 15
457	457	(i) subtracting the federal adjusted gross income of the taxpayer 16
458	458	from $137,000.00; 17
459	459	(ii) dividing the value under subdivision (i) of this subdivision (B) 18
460	460	by $10,000.00; and 19 BILL AS INTRODUCED H.74
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462	462
463	463
464	464	VT LEG #379192 v.1
465	465	(iii) multiplying the value under subdivision (ii) of this 1
466	466	subdivision (B) by the federally taxable benefits received under the Social 2
467	467	Security Act. 3
468	468	(C) If the federal adjusted gross income of the taxpayer is equal to or 4
469	469	greater than $137,000.00, no amount of the federally taxable benefits received 5
470	470	under the Social Security Act shall be excluded under this section. 6
471	471	(2) For taxpayers whose filing status is married filing jointly: 7
472	472	(A) If the federal adjusted gross income of the taxpayer is less than or 8
473	473	equal to $142,000.00, all federally taxable benefits received under the Social 9
474	474	Security Act shall be excluded. 10
475	475	(B) If the federal adjusted gross income of the taxpayer is greater 11
476	476	than $142,000.00 but less than $152,000.00, the percentage of federally taxable 12
477	477	benefits received under the Social Security Act to be excluded shall be 13
478	478	proportional to the amount of the taxpayer’s federal adjusted gross income 14
479	479	over $142,000.00, determined by: 15
480	480	(i) subtracting the federal adjusted gross income of the taxpayer 16
481	481	from $152,000.00; 17
482	482	(ii) dividing the value under subdivision (i) of this subdivision (B) 18
483	483	by $10,000.00; and 19 BILL AS INTRODUCED H.74
484	484	2025 Page 21 of 24
485	485
486	486
487	487	VT LEG #379192 v.1
488	488	(iii) multiplying the value under subdivision (ii) of this 1
489	489	subdivision (B) by the federally taxable benefits received under the Social 2
490	490	Security Act. 3
491	491	(C) If the federal adjusted gross income of the taxpayer is equal to or 4
492	492	greater than $152,000.00, no amount of the federally taxable benefits received 5
493	493	under the Social Security Act shall be excluded under this section. [Repealed.] 6
494	494	* * * 7
495	495	(e) Requirement to elect one exclusion. A taxpayer of this State who is 8
496	496	eligible during the taxable year for the Social Security income exclusion under 9
497	497	subsection (a) of this section and any of the exclusions under subsections (b)–10
498	498	(d) of this section shall elect either one of the exclusions for which the 11
499	499	taxpayer is eligible under subsections (b)–(d) of this section or the Social 12
500	500	Security income exclusion under subsection (a) of this section, but not both, 13
501	501	for the taxable year. A taxpayer of this State who is eligible during the taxable 14
502	502	year for more than one of the exclusions under subsections (b)–(d) of this 15
503	503	section shall elect only one of the exclusions for which the taxpayer is eligible 16
504	504	for the taxable year. 17
505	505	Sec. 9. 32 V.S.A. § 5811 is amended to read: 18
506	506	§ 5811. DEFINITIONS 19
507	507	As used in this chapter unless the context requires otherwise: 20
508	508	* * * 21 BILL AS INTRODUCED H.74
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510	510
511	511
512	512	VT LEG #379192 v.1
513	513	(21) “Taxable income” means, in the case of an individual, federal 1
514	514	adjusted gross income determined without regard to 26 U.S.C. § 168(k) and: 2
515	515	* * * 3
516	516	(B) decreased by the following items of income (to the extent such 4
517	517	income is included in federal adjusted gross income): 5
518	518	* * * 6
519	519	(iv) the portion of certain retirement income and federally taxable 7
520	520	benefits received under the federal Social Security Act that is required to be 8
521	521	excluded under section 5830e of this chapter and all federally taxable benefits 9
522	522	received under the Social Security Act; 10
523	523	* * * 11
524	524	Sec. 10. 32 V.S.A. § 5813 is amended to read: 12
525	525	§ 5813. STATUTORY PURPOSES 13
526	526	* * * 14
527	527	(w) The statutory purpose of the partial exemption of federally taxable 15
528	528	benefits under the Social Security Act and certain retirement income in section 16
529	529	5830e of this title is to lessen the tax burden on Vermonters with low to 17
530	530	moderate income who derive part of their income from Social Security benefits 18
531	531	and certain retirement income. 19
532	532	* * * 20 BILL AS INTRODUCED H.74
533	533	2025 Page 23 of 24
534	534
535	535
536	536	VT LEG #379192 v.1
537	537	(aa) The statutory purpose of the exemption of all federally taxable benefits 1
538	538	under the Social Security Act in subdivision 5811(21)(B)(iv) of this title is to 2
539	539	lessen the tax burden on Vermonters who derive part of their income from 3
540	540	Social Security benefits. 4
541	541	Sec. 11. EFFECTIVE DATES 5
542	542	(a) Notwithstanding 1 V.S.A. § 214, Sec. 1 and this section shall take effect 6
543	543	retroactively on January 1, 2025 and apply to taxable years on and after 7
544	544	January 1, 2025. 8
545	545	(b) Sec. 2 shall take effect on January 1, 2026 and apply to taxable years on 9
546	546	and after January 1, 2026. 10
547	547	(c) Sec. 3 shall take effect on January 1, 2027 and apply to taxable years on 11
548	548	and after January 1, 2027. 12
549	549	(d) Sec. 4 shall take effect on January 1, 2028 and apply to taxable years on 13
550	550	and after January 1, 2028. 14
551	551	(e) Sec. 5 shall take effect on January 1, 2029 and apply to taxable years on 15
552	552	and after January 1, 2029. 16
553	553	(f) Sec. 6 shall take effect on January 1, 2030 and apply to taxable years on 17
554	554	and after January 1, 2030. 18
555	555	(g) Sec. 7 shall take effect on January 1, 2031 and apply to taxable years on 19
556	556	and after January 1, 2031. 20 BILL AS INTRODUCED H.74
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558	558
559	559
560	560	VT LEG #379192 v.1
561	561	(h) Secs. 8–10 shall take effect on January 1, 2032 and apply to taxable 1
562	562	years on and after January 1, 2032. 2