H 584

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1H.584
2 Introduced by Representative Casey of Montpelier
3 Referred to Committee on
4 Date:
5 Subject: Taxation; income tax; public safety pensions
6 Statement of purpose of bill as introduced: This bill proposes to exclude
7 income from public safety pensions and survivor benefits from Vermont
8 income taxation.
9    An act relating to excluding public safety pension and survivor benefit
10    income from income taxation
11 It is hereby enacted by the General Assembly of the State of Vermont:
12 Sec. 1. 32 V.S.A. § 5811 is amended to read:
13 § 5811. DEFINITIONS
14    As used in this chapter unless the context requires otherwise:
15***
16(21) “Taxable income” means, in the case of an individual, federal
17 adjusted gross income determined without regard to 26 U.S.C. § 168(k) and:
18***
19(B) decreased by the following items of income (to the extent such
20 income is included in federal adjusted gross income):
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1***
2(iv) the portion of certain retirement income and federally taxable
3 benefits received under the federal Social Security Act that is required to be
4 excluded under section 5830e of this chapter;
5(v) the amount of any federal deduction or credit that the taxpayer
6 would have been allowed for the cultivation, testing, processing, or sale of
7 cannabis or cannabis products as authorized under 7 V.S.A. chapter 33 or 37,
8 but for 26 U.S.C. § 280E; and
9(vi) the amount of interest paid by a qualified resident taxpayer
10 during the taxable year on a qualified education loan for the costs of attendance
11 at an eligible educational institution; and
12(vii) any pension or survivor benefit income received from a U.S.
13 state or municipality relating to service as a police officer, firefighter, or
14 emergency medical technician; and
15***
16 Sec. 2. 32 V.S.A. § 5813 is amended to read:
17 § 5813. STATUTORY PURPOSES
18***
19    (bb) The statutory purpose of the exemption of pension and survivor
20 benefit income in subdivision 5811(21)(B)(vii) of this title is to lessen the tax
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1 burden on Vermonters who derive part of their income from benefits for public
2 safety professionals.
3 Sec. 3. EFFECTIVE DATE
4    Notwithstanding 1 V.S.A. § 214, this act shall take effect retroactively on
5 January 1, 2026, and apply to taxable years beginning on and after January 1,
6 2026.
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