VT H0878

All federally taxable Social Security benefits would be exempt from Vermont state income tax, eliminating the current income-based partial exemption system that phases out for individuals earning over $55,000-$65,000 and couples over $70,000-$80,000

Annual homestead property tax increases would be capped at 1% by requiring the property dollar equivalent yield and income dollar equivalent yield to be calculated accordingly

Social Security income tax exemption applies retroactively to taxable years beginning January 1, 2026

Property tax cap provision takes effect January 1, 2027

Military retirement and survivor benefit exclusions remain available and can be claimed in addition to other retirement income exclusions