Vermont Research and Development Tax Credit Summary

The Vermont R&D Tax Credit provides a tax credit for increasing qualifying research activities. Vermont leverages off of the federal section 41 rules in determining qualified research expenditures and calculating the state credit.

  • Applicable Vermont code section is 32 V.S.A Section 5930ii
  • The credit applies to qualified expenditures that occurred in Vermont
  • The credit is equal to 27% of the federal credit for expenditures made in Vermont
  • Vermont allows a 10 year carry forward period for any unused R&D tax credits

Vermont R&D Tax Credit Case Study

A manufacturing company in Vermont conducted a look back study for the prior two years for the R&D credit. This project involved a multi-year study covering the tax years 2012 through 2014. The Company qualified for the federal R&D Tax Credits of $278,930 and an additional $75,311 in Vermont state R&D Tax Credits. Summary of credits:

FEDERAL VERMONT
Year Total QREs Credit Total QREs Credit
2014 $1,002,170 $100,217 $1,002,170 $27,059
2013 927,935 92,793 927,935 25,054
2012 859,199 85,920 859,199 23,198
Total $2,789,304 $278,930 $2,789,304 $75,311

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