More Vermonters and veterans are exempt from social security taxes thanks to new AARP-backed law

Vermont Business Magazine More Vermonters will be exempt from paying state taxes on their Social Security benefits, thanks to new legislation signed by Gov. Phil Scott. The law, backed by AARP Vermont, will raise the Social Security tax income exemption threshold from $45,000 to $50,000 for single filers and from $60,000 to $65,000 for joint filers, meaning more residents will be able to receive their benefits without paying state taxes.

The law also creates a tax exclusion for the first $10,000 of retirement income earned each year from military pensions and certain retirement programs for low- and middle-income Vermonters. We were active in pushing the bill over the finish line, encouraging Vermont residents to reach out to their elected officials to voice support for the bill.

“This bill offers some needed relief for Vermonters who are struggling with the rapidly rising costs due to inflation – particularly those retirees on fixed incomes,” said Greg Marchildon, AARP Vermont state director. “It’s a measure we’ve been lobbying for over the past several years and we’re happy to see some meaningful progress.”

Vermont is one of only 12 states that taxes residents’ Social Security benefits, although several states are either considering or have advanced legislation that would eliminate the tax on at least some residents.Read more about Vermont’s new tax legislation, and visit our Social Security Research Center for more information about the program.

About AARP: AARP is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members – 114,000 in Vermont -- AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation's largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit or follow @AARP and @AARPadvocates on social media.