Vermont's tax filing rules make it common to file a return whether you're a nonresident or part- or full-year resident earning state income. If your situation warrants filing, you'll have to complete the state forms and necessary schedules by the due date. While you'll need to look elsewhere to file your Vermont taxes, the state's myVtax website will help you with paying your taxes, applying for an extension and checking your return status.
Who Must File Vermont Income Taxes?
To determine whether you need to file taxes, the first thing the state looks for is whether you had to send the IRS a federal income tax return. If so, you can be liable for filing a state return, but your income will make the final determination.
The minimum income to file depends on your residency. Unless you're a nonresident, you'll file if your Vermont income exceeds $100 in 2022. As a nonresident, you'll file once you make $1,000 or higher in gross income. Note that your taxable income can go beyond wages for employment to include investment and rental income.
What Are the Forms to Use?
As a Vermont taxpayer of any residency status, you'll use the VT Form IN-111 for your tax return. Along with completing the four standard pages detailing your income, tax payments, deductions and credits, you'll often fill out some schedules and supplements along the way:
- IN-113 for income adjustments for part-year residents and nonresidents
- IN-112 for state tax credits and adjustments
- HS-122 and HI-144 for the property tax credit and homestead declaration
- IN-199 for nonrefundable credits and state tax adjustments
- PR-141 for the renter rebate claim
You can download these necessary Vermont tax forms from the Vermont Department of Taxes website or request to have paper forms mailed to you.
What Is the Tax Rate in Vermont?
Vermont has four state income tax brackets for the 2021 tax year. They vary based on your filing status and taxable income:
- 3.35 percent if your taxable income is $1 to $40,950 and you're filing single or if your taxable income is $1 to $68,400 and you're married filing jointly
- 6.6 percent if you taxable income is $40,951 to $99,200 and you're filing single or if your taxable income is $68,401 to $165,350 and you're married filing jointly
- 7.6 percent if your taxable income is $99,201 to $206,950 and you're filing single or if your taxable income is $165,351 to $251,950 and you're married filing jointly
- 8.75 percent if your taxable income is more than $206,951 and you're filing single or if your taxable income is more than $251,951 and you're married filing jointly
What Are the Filing Deadline and Extension Process?
Vermont follows the federal tax return deadline, which is April 15 of the next year as long as that date doesn't fall on a holiday or weekend. Since in 2022, April 15 is a holiday, your 2021 Vermont state tax return due date is April 18, 2022. If you end up owing the state any taxes, you'll need to send your tax payment online or by mail before this deadline passes as well.
The state offers an extension for submitting your tax return – except for Forms PR-141 and HS-122, which can't be extended. This option can give you an October due date so that you get six months to prepare and file the return. A law passed in 2020 leads to an automatic tax return extension as long as you already obtained a federal one. Otherwise, you'll have to fill out an application with your request.
The easiest route is using the myVTax website and selecting the "File an Extension" option under "Returns." However, you can also fill out the extension application Form IN-151 and mail it to: Vermont Department of Taxes, P.O. Box 1779, Montpelier, VT 05601-1779. In either case, you'll still need to send your tax payment to Vermont by April 18, 2022, since you can't extend this due date.
What Are the Penalties for Late Filing and Underpayment of Taxes?
Penalties for not filing your Vermont income tax return on time or underpaying taxes will depend on the amount you owe the state.
You'll typically pay a penalty of 5 percent of the Vermont taxes due every month your return is late, and a $50 fee applies once two months have passed whether you owe taxes or not. You'll also incur a 1 percent penalty on any tax that goes unpaid. At the same time, interest will apply to the unpaid tax amount.
Vermont has multiple ways to help with your tax bill if you can't afford to pay it all at once. Such options can reduce the burden of penalties. For example, you can request a payment plan, make an offer or submit Form TAX-693 to demonstrate your ability to pay.
Where Do I Mail/E-file My Vermont Return?
A tax professional can help you e-file your Vermont individual income tax return, but you can do it yourself with tax preparation software too. You can look into the IRS Free File program that allows for free state and federal filing through popular vendors if your income doesn't exceed $72,000. Credit Karma, H&R Block, FreeTaxUSA, TurboTax and TaxAct are some online providers with free or paid options to consider regardless of your income.
When going with paper filing versus electronic filing, the state of Vermont advises that you send your return if you are including a payment to: Department of Taxes, P.O. Box 1779, Montpelier, VT 05601-1779 or, if you're not including a payment to: Department of Taxes, P.O. Box 1881, Montpelier, VT 05601-1881.
How Do I Pay Taxes Due?
The myVTax website has a "Make a Payment" option under "Payments" where you can use a bank account or credit card for a tax payment at any time. If you use a credit card rather than let the state debit your bank account, you'll incur a 3 percent convenience fee. If you want to pay at the time of filing your taxes online, you can pay through the tax preparation software you use.
To make money order and check payments, you'll want to fill out the IN-116 income tax payment voucher. You'll send the payment, voucher form and your paper return, if necessary, to: Vermont Department of Taxes, P.O. Box 1779, Montpelier, VT 05601-1779.
Where Can I Check My Vermont Refund Status?
The Vermont Department of Taxes gives an estimated processing time of up to eight weeks if you e-file and up to 12 weeks if you mail your return. You'll get the fastest result if your choose direct deposit instead of requesting a paper check.
Unless you have an issue that requires a representative's help, the state recommends using the online tax refund checker available on the myVTax website. You'll find a "Check the Status of Your Return" option under "Refunds," and this takes you to a page with a button to see your refund status. You'll provide your Social Security number, zip code, last name and refund amount.
This tool should start to show your return status after three days for an e-filed return or eight weeks for a paper return. You can call (802) 828-2865 if you have problems checking the status or have questions.
What About Vermont Taxes if You’re Self-employed?
If you're self-employed in Vermont, you may just need to file a personal income tax return, especially if you're classified as a sole proprietor. You would then just pay the Vermont personal tax rates on your business income. However, unlike those who have employers, you must estimate your tax liability and send quarterly payments, which you can do through myVTax.
What About Vermont Taxes if You’re a Business?
Vermont has various tax rates and tax forms for businesses, and your requirements depend on your business entity type. For example, some businesses such as limited liability companies and partnerships complete a business entity income tax return and have a $250 minimum tax. C-corporations, however, have to file Form CO-411.
Rates and dates in this article are correct as of publication. Check for any changes at the Vermont Department of Taxes before you file.
- Vermont Department of Taxes: 2021 Vermont Tax Rate Schedules
- Vermont Department of Taxes: Check Your Return or Refund Status
- Vermont Department of Taxes: Who Needs To File?
- Vermont Department of Taxes: Tax Year 2021 Personal Income Tax Forms
- Vermont Department of Taxes: Interest and Penalties
- Vermont Department of Taxes: File an Extension
- Vermont Department of Taxes: Payment Options
- Vermont Department of Taxes: How to File
- Vermont Department of Taxes: Filing Paper Returns or Payments by Mail
- IRS: Free File: Do your Federal Taxes for Free
- Vermont Department of Taxes: Paying Tax Owed
- Vermont Department of Taxes: Form IN-116
- Vermont Department of Taxes: Personal Income Tax
- Vermont Department of Taxes: Business Entity Income Tax
- Vermont Department of Taxes: Corporate Income Tax
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.