Skip to main content

Tax Credits and Adjustments for Individuals

    Credits Available to Individuals

    Tax credits are available to certain taxpayers at both the state and federal levels. A tax credit is a tax incentive which allows qualified taxpayers to reduce their tax liability to the state. The following tax credits are available for individuals and businesses and provide incentives to support business growth and activities in Vermont.

    • Vermont Charitable Contribution Tax Credit

    • Charitable Housing Investment Tax Credit (HITC)

    • Vermont Child Tax Credit

    • Vermont Child and Dependent Care Credit

    • Vermont Earned Income Tax Credit (EITC)

    • Elderly or Permanently Disabled Tax Credit

    • Vermont Farm Income Averaging Credit

    • Vermont Higher Education Investment Plan (VHEIP) also known as the Vermont 529 Plan (VT529)

    • Credit for Income Tax Paid to Another State or Canadian Province

    • Qualified Sale of Mobile Home Park Credit

    • Vermont Research and Development Tax Credit

    To learn more about deductions, exclusions, and other adjustments, please see Vermont taxable income.


    Interest and dividend income from non-Vermont state and local obligations are taxable in Vermont. A Vermont obligation is one from the state of Vermont or a Vermont municipality.

    This may have been paid directly to you or through a mutual fund or other legal entity that invests in Vermont state and local obligations. If you receive this income from a mutual fund that has only a portion of its assets invested in Vermont state and local obligations, use only the amount for the Vermont obligation(s).

    Additions to VT Tax:

    • Tax on Qualified Plans including Individual Retirement Accounts (IRA), Health Savings Accounts (HSA), and Medical Savings Accounts (MSA)

    • Recapture of Federal Investment Tax Credit

    • Lump Sum Distributions (federal return)

    • Recapture of Vermont Tax Credits

      • Recapture occurs when a previously claimed credit is changed

    Subtractions from VT Tax: