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Nonresident but Earned Vermont Income

If you were not a resident of Vermont during the tax year but earned Vermont income, calculate your income using the information that follows to determine whether you must file a Vermont income tax return.

You are a nonresident if you do not qualify as a resident during any part of the taxable year.

If you were not a resident of Vermont for the full tax year but earned income in Vermont, then your income is the sum of the following types of income as long as they are required to be included in federal adjusted gross income:

  • Rents and royalties from ownership of property located in Vermont

  • Gains from the sale or exchange of Vermont property, including the sale of timber or timber rights

  • Wages, salaries, commissions, or other income received for services performed in Vermont

  • Income from every business, trade, profession, or occupation conducted in Vermont, including money received:

    1. under an agreement not to compete with a business operation in Vermont

    2. for goodwill associated with the sale of a Vermont business, or

    3. for contractual services associated with the sale of a Vermont business unless it is shown that the compensation for services does not constitute income from the sale of the business

  • Income previously deferred under a nonqualified deferred compensation plan and income derived from such previously deferred income

Nonresidents with a filing requirement will file Form IN-111, Vermont Income Tax Return and Schedule IN-113, Income Adjustment Calculations.

The following types of income are not included as Vermont income for a nonresident:

  • Income received for a dramatic performance in a commercial film as long as the income is excluded from personal income tax in the state of residence

  • Full-time, active duty pay while stationed in Vermont from the armed services when the pay is earned outside of Vermont. For more information, see Vermont Income Tax for Military Personnel.

  • Activities or services to create or maintain a web or internet site.

If the result is net income of more than $100 or gross income (income before any losses) of more than $1,000, then you must file a Vermont income tax return.

Other Types of Income

As a general rule, taxpayers are required to use the same filing status for their Vermont income tax return as they do on their federal return. For example, when filing a federal return using Married Filing Jointly status, taxpayers should file a should file a Married Filing Jointly Vermont tax return.

There are two exceptions to the general rule:

  • When a spouse is not a resident of Vermont and has earned no income in Vermont

  • When the couple has been joined by civil union

The exceptions are described in detail in Technical Bulletin 55, Exceptions to Requirements that Vermont Filing Status Must Mirror Federal Filing Status; Procedures for Allocation of Exemptions and Deductions for Recomputed Federal Income Tax Returns.

If you are a nonresident of Vermont and received income from activities necessary to create or maintain your website, the income is not taxed by Vermont.

This includes:

  • Income from the ownership of data or programming code in Vermont, or the use of the data or programming code by someone other than the owner, or use by someone not in Vermont

  • If you own or receive services from computer servers in Vermont

  • If you receive services from a computer service provider or web hosting service in Vermont

Income received by a nonresident through a partnership, limited liability company, or trust also is not taxed by Vermont if the entity’s activities in Vermont are limited to the above activities and no other activity of the entity creates a connection (nexus) with Vermont.