H 878 — An act relating to Vermont income and education property taxes

Bill Text

• Introduced As IntroducedOpens in a new window Current pdf

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This bill exempts all Social Security benefits from income tax and limits annual property tax increases to one percent.

• 32 V.S.A. § 5830e

  the percentage of federally taxable benefits received under the Social Security Act to be excluded shall be proportional to the amount of the taxpayer’s federal adjusted gross income over $55,000.00, determined by: (i) subtracting the federal adjusted gross income of the taxpayer from $65,000.00; (ii) dividing the value under subdivision (i) of this subdivision (B) by $10,000.00; (iii) multiplying the value under subdivision (ii) of this subdivision (B) by the federally taxable benefits received under the Social Security Act. → no amount of the federally taxable benefits received under the Social Security Act shall be excluded under this section.

  This change removes the income limits for Social Security tax exemptions, allowing all Social Security benefits to be tax-exempt.

• 32 V.S.A. § 5811

  the portion of certain retirement income and federally taxable benefits received under the federal Social Security Act that is required to be excluded under section 5830e of this chapter and all federally taxable benefits received under the Social Security Act; → all federally taxable benefits received under the Social Security Act;

  This change clarifies that all Social Security benefits are exempt from taxation, eliminating any prior conditions.

• 32 V.S.A. § 5813

  the statutory purpose of the partial exemption of federally taxable benefits under the Social Security Act and certain retirement income in section 5830e of this title is to lessen the tax burden on Vermonters with low to moderate income who derive part of their income from Social Security benefits and certain retirement income. → the statutory purpose of the exemption of all federally taxable benefits under the Social Security Act in subdivision 5811(21)(B)(iv) of this title is to lessen the tax burden on Vermonters who derive part of their income from Social Security benefits.

  This change adjusts the legislative intent to focus on exempting all Social Security benefits instead of just a partial exemption.

• 32 V.S.A. § 5402

  Notwithstanding any other provision of law to the contrary, the property dollar equivalent yield and income dollar equivalent yield established under this section and section 5402b of this chapter shall be calculated so that the average homestead property tax bill in Vermont increases by not more than one percent over the previous year.

  This addition establishes a cap on property tax increases, limiting them to one percent annually.

Action History

1. February 04, 2026

   Read first time and referred to the Committee on Ways and Means

Sponsors

• Kevin C Winter · Primary
• Michael "Mike" Tagliavia · Primary
• Debra L Powers · Primary
• Sandra "Sandy" H Pinsonault · Primary
• Rob North · Primary
• Todd Nielsen · Primary
• Michael R Morgan · Primary
• Alicia Malay · Primary
• Larry Labor · Primary
• Kenneth W Goslant · Primary
• VL L Coffin IV · Primary
• David "Dave" Bosch · Primary
• Zachary J Harvey · Primary

Subjects