If you are active duty military and Vermont is your military state of residence, exempt military pay is the amount of military pay received in 2023 that is included in your Federal Adjusted Gross Income.
2023 Vermont Income Tax Return Booklet, here, page 34, line 32 states:
Enter the amount of Vermont exempt military pay received in 2023 that is included in your federal Adjusted Gross Income.
Exempt military pay is:
I. Wages earned from the armed services for full-time active duty outside of Vermont. You may be asked to provide the Required Supporting Documents: Copy of active duty orders.