New Vermont Charitable Contribution Tax Credit Makes Charitable Giving Easier
It’s the "Giving Season", and many Vermonters are opening their hearts and checkbooks to donate to their favorite charities. With the current attention on giving, the Vermont Department of Taxes is teaming up with Common Good Vermont to remind Vermonters of the positive impact of giving and the changes in the 2018 Vermont income tax law that could benefit them if they donate.
The Scott Administration worked with the 2018 Legislature to provide a nonrefundable charitable contribution credit against Vermont taxpayers’ tax liability. This credit is 5 percent of the first $20,000 in eligible charitable contributions made during the taxable year regardless of whether the taxpayer itemizes on their federal tax return.
According to Kate McGowan, director of Common Good Vermont and Center for New Leadership, “The Giving Season is here and as Vermont nonprofits are reaching out to inspire giving today, it's more important than ever that we support the essential work nonprofits do in our communities. Thanks to our state government and leaders in Montpelier, Vermont taxpayers will continue to receive a tax benefit from their contributions to eligible nonprofits with the support of Vermont's Charitable Contribution Tax Credit.”
“Under the prior federal and Vermont tax law, approximately 70% of Vermonters did not receive a tax benefit for charitable giving. With this year’s changes, all Vermonters with a tax liability are now eligible to receive the 5% credit on their 2018 Vermont income taxes. With the credit, comes some important record keeping requirements, and my team has assembled some resources to help taxpayers understand the credit, and what documentation they need to keep,” said Kaj Samsom, Tax Commissioner.
To help taxpayers understand this new opportunity, the Vermont Department of Taxes has created a webpage dedicated to the Charitable Contribution Tax Credit. Visitors to www.tax.vermont.gov will find links to the IRS website listing organizations that are eligible to receive qualified charitable contributions and recommendations on record keeping for donors.