You can claim a Vermont income tax credit of up to $250 if you served on active duty in the U.S. Armed Forces and have a low income. The full $250 applies when your federal adjusted gross income is $25,000 or less. Between $25,000 and $30,000 the credit is reduced by $5 for every $100 of income above $25,000, and above $30,000 there is no credit. The credit starts with the 2025 tax year, on returns filed after 1 January 2026.
There is nothing to apply for in advance. Claim the credit on your Vermont income tax return for the 2025 tax year or later.
Your DD214 or other proof of active duty service, and your federal return showing your adjusted gross income.
