MONTPELIER – The 2020 tax season officially opened on Jan. 27 at both the federal and state levels. This is the date that the IRS and Vermont began accepting and processing personal income tax returns for tax year 2019.
The Vermont Department of Taxes recommends filing electronically (e-file) through a commercial software vendor to increase accuracy and have your refund processed sooner. In 2019, 86 percent of all Vermont personal income tax returns were filed electronically. E-filing provides a secure platform that transmits returns to the department more quickly than mailing, and e-filed returns are more easily processed. Last year, taxpayers who e-filed their returns on average received their refunds more than twice as fast as those who filed paper returns.
Free File is a great option for Vermont filers who qualify. In 2019, about 65 percent of Vermont taxpayers qualified for Free File, but only 5 percent of those eligible used the service. Visit the Free File page on the Department of Taxes’ website to see who qualifies.
Tax Commissioner Craig Bolio reminds Vermonters that “all taxpayers are eligible to utilize the Vermont Charitable Giving Tax Credit established during the 2018 legislative session, regardless of whether they itemize on their federal tax returns.” The credit is 5 percent of up to $20,000 in charitable contributions to eligible organizations and can be taken by any Vermont personal income tax filer, regardless of whether the filer itemizes. Organizations must be eligible under IRS rules, and filers should keep good records of donations to include receipts and other supporting documentation of their donations. In late 2019, the Department worked with e-file vendors to make it easier to take advantage of this credit.
Under a change to the law passed during the 2019 Vermont legislative session, the “property tax adjustment” is now the “property tax credit.” Only the name has changed. Vermonters who file the Homestead Declaration and Property Tax Credit Claim will continue to use Form HS-122 as they have done in previous years.
The department offers the following tips to make filing go more smoothly:
- Wait to receive Form W-2, Wage and Tax Statement, and any notice of any other income on Form 1099 or other sources before filing. Filing too early without the proper supporting documents could delay processing of the return. Vermont employers must provide their employees and the Department of Taxes with W-2s and 1099s for tax year 2019 by Jan. 31, 2020.
- The department recommends reviewing federal and state Form W-4s at the beginning of the year or when the taxpayer’s status changes (marriage, divorce, number of dependents, etc.). All Vermont employees should complete the W-4VT to make sure the right amount of Vermont tax is withheld. Completing only the federal Form W-4 may result in the wrong amount of Vermont tax being withheld.
- For those who prefer using paper forms, Vermont forms, schedules, worksheets and instructions are available on the department’s website at tax.vermont.gov. The department will mail the 2019 Vermont Income Tax Return Booklet and paper forms upon request beginning in early February.
- Check online at myVTax.vermont.gov for the status of tax refunds, Homestead Declarations, Property Tax Credits, Renter Rebates, and more.