Vermont Disabled Veteran Benefits: Everything You Qualify For

If you're a disabled veteran living in Vermont, the Green Mountain State has more waiting for you than cold winters and scenic views. Vermont offers a real property tax break, income tax relief, vehicle fee exemptions, and free hunting and fishing licenses — but only if you know what to ask for and when to apply. This guide walks you through every benefit, who qualifies, and exactly how to claim it.

The good news is that most of these benefits don't depend on being 100% disabled. Vermont hands out meaningful help at the 50% mark and even lower in some cases. Let's break it down benefit by benefit so you can see what applies to you.

Vermont Disabled Veteran Property Tax Exemption

The single biggest benefit for Vermont veterans is the property tax exemption under 32 V.S.A. § 3802(11). It works by lowering the assessed value of your home before your taxes are calculated. If your home is worth $200,000 and you get a $20,000 exemption, you're only taxed on $180,000 of value.

Every Vermont town must give at least a $10,000 exemption. Cities and towns can vote to increase that to as much as $40,000 — but that's up to your local voters. Check with your town clerk to see what your town offers.

Who Qualifies for the Property Tax Exemption?

You qualify if you're a disabled veteran who owns your primary residence in Vermont and you meet one of these conditions:

1. 50% or higher VA disability rating — receiving service-connected disability compensation.
2. Improved (non-service-connected) Pension — also called VA Pension or Widower's Pension.
3. Permanent medical military retirement — collecting military retirement pay for a medical retirement.

Think of it this way: Vermont sets the bar at 50%. If your rating is 50% or higher, you're in. There's no special bonus at 100% on this particular benefit — the same minimum applies at any qualifying rating. What changes at higher ratings is paperwork (more on that below).

Surviving Spouses and Children

The exemption carries over to unremarried surviving spouses and minor children of veterans who met the eligibility criteria at the time of their death. Surviving spouses may also be eligible based on Dependency and Indemnity Compensation (DIC) or Death Pension.

The exemption applies only to a home you own and live in as your primary residence. If you rent, you can't claim it, and you can't pass it along to a landlord.

How to Apply — and the Deadline That Matters

Here's where veterans often miss out: you must apply every single year before May 1. The application goes to the Vermont Office of Veterans Affairs, not to your town.

1. Get your VA Summary of Benefits Letter — download it at va.gov or call the VA at (800) 827-1000.
2. Complete the current-year property tax application from the Office of Veterans Affairs.
3. Submit both to the Office of Veterans Affairs by May 1.

There's one exception to the annual renewal. If you're rated totally and permanently disabled (P&T), you only provide proof of eligibility the first year. If you move to a different town, you'll need to prove eligibility again for the new home.

Missed the deadline? If you're late but apply between May 1 and October 1, you can still ask your town's Board of Abatement directly for relief on municipal and education taxes. If the late filing was due to sickness, disability, or another good cause, the board may grant it (though possibly at a reduced amount). Don't let a missed deadline stop you from asking.

The reduced assessment does not lower your home's resale value — it's purely a tax benefit.

Vermont Income Tax Benefits for Veterans

Vermont gives veterans two separate income tax breaks, and both are worth knowing about.

1. Military Retirement Pay Exemption

Under Act 71, Vermont exempts military retirement pay from taxable income — subject to income limits:

This covers retired pay from every branch of the uniformed services — Army, Navy, Air Force, Marines, Coast Guard, Space Force, National Guard, Reserves, and the Commissioned Corps of the Public Health Service and NOAA.

One important catch: you can only claim one retirement income exemption per year. If you get both military retirement pay and Social Security, you must choose between the military retirement exemption and the Social Security exemption — you can't stack them. For most veterans, the military retirement exemption is the more valuable one, so weigh your options carefully.

2. Vermont Veteran Tax Credit

Vermont also offers a $250 refundable tax credit for veterans with modest incomes. "Refundable" means it's money back in your pocket even if you owe no tax at all.

To claim it, you need a discharge record or other proof of separation that verifies your service, and your income must fall within the limits. If two veterans are married and file jointly with combined income under $30,000, both can claim the credit.

And one more note: VA disability compensation itself is not taxable at the state level, just as it isn't federally. That money stays in your pocket.

Vermont Vehicle and DMV Exemptions for Disabled Veterans

Vermont's vehicle benefits are narrower than many states', so it pays to understand exactly what applies. The exemptions are aimed at veterans whose disabilities required their vehicle to be modified — and where that modification was paid for by the VA.

If the VA helped you purchase or modify a vehicle to accommodate your disability, you can be exempt from:

• Vehicle sales tax (32 V.S.A. § 8911)
• Registration fees (23 V.S.A. § 378)
• License fees
• Title fees (23 V.S.A. § 2002)

These exemptions only apply to a motor vehicle acquired by a veteran with financial assistance from the VA for adaptation. Veterans who are 100% disabled but whose vehicles weren't VA-purchased or modified do not automatically qualify. This is a common point of confusion — don't assume the benefit is automatic just because of a high rating.

Disabled Veteran License Plate

Vermont offers a Disabled Veteran license plate for eligible disabled veterans. You'll need your Certificate of Veteran Status (form VG-168) to apply. Note that these veteran specialty plates generally can't be personalized.

Other DMV Perks Worth Knowing

Even if you don't qualify for the adapted-vehicle exemptions, a few other veteran-friendly rules apply at the DMV:

• "VETERAN" designation — you can add a veteran designation to your driver's license.
• Driver's license fee exemption — honorably discharged veterans aren't charged for a driver's license (23 V.S.A. § 609).
• Military skills test waiver — veterans applying for a CDL may qualify for a skills test waiver.

Free Hunting and Fishing Licenses for Disabled Veterans

If you like the outdoors, Vermont throws in a nice one. Under 10 V.S.A. § 4255, a Vermont resident who is a veteran with a service-connected disability of 60% or higher can get a free permanent fishing or combination license. You just need a certificate or letter from the VA confirming your disability percentage (call 1-800-827-1000 for the VA Benefits Verification Letter).

Separately, a Vermont resident who is paraplegic or certified by a physician as having a permanent, severe mobility disability can receive a free permanent fishing, hunting, or combination license.

Education Benefits: The Vermont National Guard Tuition Benefit

Vermont's headline education program for service members is the Vermont National Guard Tuition Benefit Program (16 V.S.A. § 2857). It covers full tuition at the in-state rate at any Vermont State College or the University of Vermont (UVM) for active Vermont National Guard members, and up to the UVM in-state rate at eligible private or out-of-state schools when the degree program isn't offered in Vermont.

There's a catch that surprises some Guard members: this is structured as a forgivable benefit, not a free grant. For every academic year funded, you commit to two years of Guard service. If you leave the Guard before fulfilling the service commitment (unless it's for good cause), you repay the tuition on a pro-rata basis through a promissory note.

Eligibility requirements include being an active Guard member who has completed basic training, maintaining satisfactory academic progress, and having used your available federal education benefits first (like the Post-9/11 GI Bill and federal tuition assistance). Funding is limited and awarded first-come, first-served, so apply early.

Vermont doesn't offer a separate, broad tuition waiver specifically for disabled veterans and their dependents the way some other states do. If you're a disabled veteran (or a spouse or child) planning to study, your best paths are the federal Post-9/11 GI Bill (which many veterans can transfer to dependents) and scholarships through the Vermont Student Assistance Corporation (VSAC). Check with VSAC and your school's veterans office for what's available.

State Employment Preference for Veterans

Vermont gives veterans a preference in state hiring. In practical terms, eligible veterans can:

• Get additional points added to their scores on competitive exams.
• Apply for positions that are normally restricted to current state employees ("state promotional only" jobs).
• Get preference when competing for state jobs.

This applies to honorably discharged veterans and, in many cases, to unremarried surviving spouses of veterans. Contact the Vermont Department of Human Resources for the specifics of how preference points are applied to a given application.

Survivor Benefits for Families

Veteran families also have protections in Vermont:

• Property tax exemption passes to unremarried surviving spouses and minor children of qualifying veterans.
• DIC (Dependency and Indemnity Compensation) — a tax-free federal benefit for survivors of service members who died in the line of duty or from a service-connected condition. This is federal, but Vermont's Office of Veterans Affairs can help you file.
• State hiring preference extends to unremarried surviving spouses.

Vermont Disabled Veteran Benefits at a Glance

Next Steps: What You Should Do

Here's your practical action plan, in order of what saves you the most money:

1. Claim your property tax exemption first. Download your VA Summary of Benefits Letter and submit your property tax application to the Vermont Office of Veterans Affairs before May 1. This is your single biggest benefit — don't lose it to a missed deadline.
2. Ask your town about the $40,000 option. If your town only gives the $10,000 minimum, work with your town clerk about raising it at the ballot.
3. Review your tax return. If you receive military retirement pay, make sure you're taking the military retirement exemption (and remember you must choose between it and the Social Security exemption). And check whether you qualify for the $250 veteran tax credit.
4. Check your vehicle. If the VA paid to modify your vehicle for your disability, contact the DMV about the sales tax, registration, and fee exemptions.
5. Get your free outdoor licenses. If you're 60% disabled, call the VA for your benefits letter and take it to Vermont Fish & Wildlife for your free permanent license.

For help filing, contact the Vermont Office of Veterans Affairs at (802) 828-3379 — they handle the property tax exemption directly and can point you to every other benefit on this list. You earned these benefits. Make sure Vermont delivers them.