Estate and Fiduciary Taxes

In May of 2016 the Vermont legislature voted to change how the estate tax is calculated.  For those dying on January 1st of 2016 or after, the estate tax will only apply if the value of the estate is $2.75M or over.  The tax will be calculated based on the amount over $2.75M, not from the first dollar as it was previously.  There will be a flat tax rate of 16% and gifts made within two years of death will be added back. For more detailed information, you can refer to the corresponding legislation, Act 146.

When a person dies, the person’s estate is responsible for filing:

Filing a Vermont Income Tax Return

Who Needs to File a Vermont Income Tax Return?

If a deceased taxpayer received Vermont income between the beginning of the taxable year and the date of death and is required to file a federal income tax return, a Form IN-111, Vermont Income Tax Return, also must be filed on the behalf of the deceased taxpayer. The return, reflecting income received from January until the date of death, should be filed with the Vermont Department of Taxes, along with payment for any tax due.

To claim an income refund on the deceased taxpayer’s behalf, attach one of the following documents to Form IN-111: