Vermont Filing Requirements

As Vermont’s nickname, the Green Mountain State implies, its residents and businesses are often faced with a lot of paperwork when filing state taxes. Thankfully, e-filing can help reduce the time spent handling tax documents and ensure accuracy of your return. While the state’s income tax rate is higher than most, the state does offer several exemptions that make it a good choice for small business owners. These exemptions include a lower sales tax than most states and the exclusion of motor vehicle purchases from sales tax. Vermont also has a lower property tax than most other states and does not tax Social Security benefits.

If you are a nonresident of Vermont but earned income in the state, you must file a Vermont income tax return using Form IN-111 and Schedule IN-113. This form is available online and by mail. Nonresidents who are required to file must also report their federal income and any taxable foreign income with the Vermont Department of Taxes. By default, LLCs are taxed as partnerships at the federal level but can elect to be taxed as corporations by filing IRS Form 2553. The Vermont Department of Taxes will then honor this election at the state level. Single-Member LLCs are taxed like a Sole Proprietorship and Multi-Member LLCs are taxed as Partnerships in the state of Vermont.

Who Needs to File?

• Residents and Part-Year Residents: You must file a Vermont income tax return if you’re considered a resident or part-year resident of Vermont, and you are required to file a federal tax return and your Vermont income exceeds $100.
• Non-Residents: You need to file a Vermont return if you’re a non-resident but earned income in Vermont, and you are required to file a federal tax return and your Vermont gross income is more than $1,000.

Vermont Tax Filing Deadlines

Vermont follows the federal income tax filing deadlines. For tax year 2024, the deadline to file your Vermont personal income tax return and pay any tax owed is April 15, 2024. This applies unless an extension is granted.

Filing Extensions:

Vermont allows extensions to file your personal income tax return, but it’s important to remember:

• An extension only gives you more time to file the return, not to pay any taxes owed.
• To avoid penalties and interest, you must still pay all taxes due by the original April 15th deadline.

You can find more information on filing extensions on the Vermont Department of Taxes website: http://tax.vermont.gov/filing-season-updates.