Up to $2,000 of your pay for service in the Vermont National Guard or the U.S. Armed Forces Reserves is exempt from Vermont income tax, as long as your federal adjusted gross income is less than $50,000.
There is nothing to apply for. Subtract up to $2,000 of your Guard or Reserve pay when you report your income on your Vermont return.
Your Leave and Earnings Statements or W-2 showing your Guard or Reserve pay, and your federal return showing your adjusted gross income.