Disabled Veteran Benefits in Vermont

This is Vermont's main benefit for disabled veterans. If you receive VA disability compensation at 50% or higher, the state exempts $10,000 of appraised value from your home. Veterans on a VA non-service-connected pension or a permanent medical military retirement qualify too, and so do surviving spouses of veterans who had the exemption. It only applies to a home you own and live in as your primary residence, and it does not cover any part used for business or rental.

The $10,000 is a floor. Towns can vote to raise it to $40,000, so the size of your break depends on where you live. Veterans who want a bigger exemption have to get the question on their town's ballot.

You send proof of eligibility to the Vermont Office of Veterans Affairs, and it must arrive before May 1. Most veterans must send proof from the VA every year. Veterans determined to be totally and permanently disabled only have to prove it once.

Under Act 71, signed in June 2025, all military retirement and survivor benefit income is exempt from Vermont income tax when your adjusted gross income is $125,000 or less. Between $125,000 and $175,000 the exempt amount shrinks, and at $175,000 or more there is no exemption. If you also receive Social Security, you have to pick one: the Social Security exemption or the military retirement exemption, not both.

Vermont also created a $250 Veteran Tax Credit, effective with the 2025 tax year. It is refundable, and it goes to veterans with adjusted gross income of $25,000 or less, shrinks between $25,000 and $30,000, and ends above $30,000.

Both are claimed when you file your Vermont return. The credit is for any Vermont resident or part-year resident with a discharge record, not just disabled veterans.

Vermont charges no registration fees to a resident veteran, discharged under other than dishonorable conditions, for a vehicle bought with financial assistance from the VA. That includes the annual emissions fee and the electric vehicle infrastructure fees, and it carries over to a replacement vehicle you own during your lifetime. Your application must include a copy of your approved VA Form 21-4502. The state also charges no driver license fee to an honorably discharged veteran in the same situation. A disability rating by itself does not waive either fee.

Separately, any veteran can get the veteran label on a license or non-driver ID, and the Office of Veterans Affairs says the plates that recognize military service come at no additional charge. That office checks your DD-214 first. There is a Disabled Veteran plate too, which asks for a medical evaluation form (VS-113) unless one was filed in the last four years. The DMV page does not state a rating cut-off for that plate, and it says some plates carry a one-time fee.

Vermont Fish & Wildlife gives a free permanent license to a Vermont resident veteran who is, or ever has been, 60% disabled due to a service-connected disability. State law says it can be a fishing, hunting or combination license and that it includes all big game licenses except moose. Note the words "ever has been": the rule does not require that you hold a 60% rating today.

You present a specific letter from the VA. The department says to call the Veterans Benefits Section at 1-800-827-1000 to see if you qualify. Non-resident veterans from states that give Vermonters the same privilege, presently New Hampshire and Maine, can get a free one-year license if they would qualify as Vermont residents.

The Green Mountain Passport gives lifetime free day-use entry to state parks. It is for Vermont residents who are 62 or older or honorably discharged veterans. You get it for $2 at your local town clerk's office.

The passport is for day-use entry. The parks fee page lists camping fees separately and shows no veteran rate for them.

The Office of Veterans Affairs names two sources of government education benefits for veterans in Vermont: the VA, which includes the GI Bill, and tuition assistance programs for members of the Vermont National Guard. Its page lists no state tuition waiver for disabled veterans.

The state's Armed Services Scholarship is for the spouse and children of military members who died on active duty since 2001, or of Vermont National Guard members who died while serving at any time. It pays the tuition charged at the University of Vermont or a Vermont State College, after a federal Pell Grant, for up to 130 credits toward an undergraduate degree. For the family of a living veteran, the federal Dependents Education Assistance program covers some spouses and children of members who were permanently and totally disabled by a service-connected condition.