VT H0074

Phases in a full Vermont income tax exemption for Social Security benefits over eight years, with complete exemption effective January 1, 2032

Raises income thresholds for the existing partial exemption annually, starting in 2025 with thresholds of $65,000 (single filers) and $80,000 (married filing jointly) for full exclusion, increasing by $10,000-$12,000 each year

Final year thresholds (2032) allow full exclusion for single filers with federal AGI up to $127,000 and married couples filing jointly up to $142,000, with partial exclusion phasing out over a $10,000 range above those amounts

Eliminates the income-based phase-out structure entirely in 2032, making all federally taxable Social Security benefits exempt from Vermont income tax regardless of income level

Taxpayers eligible for both the Social Security exclusion and other retirement income exclusions must elect only one exclusion per taxable year