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Vermont Charitable Contribution Tax Credit

Act 11, enacted July 2, 2018, created The Vermont Charitable Contribution Tax Credit, which allows taxpayers to take a credit on their personal income taxes for contributions made to eligible charities during a given tax year. This is a credit for all Vermont taxpayers beginning with contributions made in January 2018.

How to Take the Credit

Vermont's Charitable Contribution Tax Credit is a 5% credit of the first $20,000 in eligible charitable contributions made during the taxable year regardless of whether taxpayers itemize on their federal tax returns. The credit applies to charitable giving beginning with gifts made on Jan. 1, 2018. Taxpayers may take the credit on Form IN-111, Vermont Income Tax Return. This is a nonrefundable credit. A nonrefundable credit may be applied to a tax liability, but it cannot exceed the amount the taxpayer owes.

Regarding what charitable contributions are eligible for the Vermont tax credit, Vermont law follows federal law 26 U.S.C. § 170 as amended by the TCJA and the relevant regulations. The Vermont Department of Taxes recommends that taxpayers consult their tax advisers and IRS guidance for information about what charitable contributions are allowed.

It is important that taxpayers keep good records of their contributions, including receipts, canceled checks, and other documentation. The Department may ask filers who take the credit to produce donation records.

For more information, please view our press release.

2018 Legislative Highlights (including Charitable Contribution Tax Credit)
IRS Guidance: Written Record of Charitable Contribution
IRS Guidance on Eligible Charities

Learn more about other tax credits available to individuals.