How to File

For people working and earning income for the first time, it is likely they did not earn very much during the year or pay much tax. Consequently, they may not meet the requirements to file a federal income tax return.

If you are not required to file a federal return, you are not required to file a Vermont return. Please note, however, that if you are required to file a federal return, Vermont also may require you to file a return. Some individuals who are not required to file may think it is not worth the trouble to file an income tax return to get the small refund. That is up to you, but keep in mind that you have a right to file for a tax refund even if it is a small amount.

Form W-2

You need Form W-2, Wage and Tax Statement, to complete your federal and state tax forms. Form W-2 states wages, tips and other compensation you’ve earned from your employer for the tax year as well as how much tax was withheld.

Employers are required to send W-2 forms to their employees by Jan. 31 following the end of the tax year. The tax year is January 1-December 31 of the previous calendar year. For example, you should receive your Form W-2 for the 2019 tax year by Jan. 31, 2020. If you don’t receive your W-2 by end of January, ask your employer about it.

Your employer should give you several copies, a copy for your records and copies to submit with your tax forms. Vermont law requires employers to submit a copy to the Vermont Department of Taxes by Jan. 31 as well, so that the Department can match up the two forms during processing. This helps us identify the taxpayer with certainty and ensure any refund is sent to the correct taxpayer.

Form 1099

You may also receive some version of federal Form 1099, which shows income earned from a person or business that is not your employer, interest, dividends, rents, royalties, a prize or award, or other forms of income. If taxes were withheld from these sources of income, the 1099 will state that, too. If you receive a Form(s) 1099, you will need it to complete your federal tax return. For more information, read the “Instructions for Recipient” on Form 1099.

Forms You May Need

To file your federal taxes, use Form 1040, U.S. Individual Income Tax Return, and supporting schedules if needed. To file your Vermont taxes, use Form IN-111, Vermont Income Tax Return, and supporting schedules if needed. The Department of Taxes recommends e-filing your federal and state taxes using commercial vendor software. The software will walk you through the process of completing federal and Vermont returns. Because the software does the math for you, there should be fewer errors. Errors on the return may delay processing and any tax refund you are to receive.

As a first-time filer, you may be eligible to file for free using a software vendor participating in Free File. To qualify, you must meet the vendor’s requirements. Eligible Vermonters may e-file their federal and Vermont personal income tax returns free of charge through Free File. Many people who working their first jobs and are first-time taxpayers may be eligible for Free File. To make sure you are using the correct Free File portal for both federal and Vermont tax returns, go through the Vermont Department of Taxes Free File webpage and not the IRS website. Read all instructions before reviewing the list of vendors to find the vendor offer(s) that applies to you.

Understanding Your Taxes

As you work through your federal and Vermont income tax returns, you are comparing …

Taxes you’ve already paid: the amount of income taxes that have been withheld each pay period and paid to the federal and state government over the past tax year as shown on your Form W-2 and Form(s) 1099

to

Taxes you owe: the amount of income taxes you’ve already paid as shown on Form W-2 and Form(s) 1099

  • plus, any other income you have received as shown on a Form 1099
  • minus any exemptions, deductions, and credits you are eligible to claim

If you’ve paid too much tax, you will get a refund. On the other hand, if you have not paid enough tax, you will have to pay additional tax.

Your Refund

If your return shows you should get a tax refund, of course you can’t wait to get it! You may already be thinking about the many ways you plan to spend your refund—or save it for future goals.

Check the status of your refund