8. Vermont: Broadening Exemptions for Middle Earners
Vermont historically taxed most retirement income at standard state rates. In recent legislative sessions, lawmakers introduced phased exemptions for civil service pensions alongside expanded Social Security tax credits.
Current legislative debates focus on raising adjusted gross income thresholds so more retirees qualify. Advocates emphasize that retaining older residents strengthens the local volunteer base and economy.
Check the Vermont Department of Taxes before filing to see if you qualify. Marginal earners can often use these credits to eliminate their state liability.
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