Vermont R&D Tax Credits

Vermont provides a research and development credit in an amount equal to 27% of the amount of the federal tax credit allowed in the tax year for qualified research and development expenditures (QREs) under IRC § 41 that are made within the state of Vermont. If you have expenses in other states that were included in the federal calculation, the credit amount must be apportioned for only those expenses incurred for activities conducted in the state of Vermont.

Based on this calculation methodology, the federal R&D credit must be filed for the same tax year.

‍

Learn more about Vermont's R&D Tax Credit from Vermont's Department of Taxes.

‍

R&D Tax Credit Available:

Yes

‍

Eligible Entities:

C-Corporations, S-Corporations, LLCs, Partnerships

‍

Deadline for Tax Filing:

Due with Vermont Tax Return

‍

Data Required to Compute Credit:

Claim Period Qualified R&D Expenses (QREs)

‍

What Information is needed?

Federal Form 6765

‍

Credit Carryforward:

10 years

‍

The Vermont credit equals:

• 27% of the federal credit amount for QREs attributed to Vermont.
• Vermont credits can be applied to personal income tax or business/corporate income tax.

‍

Specific Item to Note:

• Company must be eligible for and claim the federal R&D credit to be able to calculate the Vermont tax credit.