Vermont's R&D credit is 27% of your federal credit.

Rate	27% of the federal Section 41 credit
Refundable	No
Carryforward	10 years
Statute	32 V.S.A. 5930ii

The credit is a percentage of the federal research credit, narrowed to Vermont. The mechanics:

• Rate. 27 percent of the federal Section 41 credit allowed for eligible research and development expenditures made within Vermont.
• It piggybacks on the federal credit. There is no separate Vermont base amount. The Vermont credit is 27 percent of the federal credit attributable to Vermont research, which makes it simple to compute once the federal number is set.
• Vermont-only. Only research and development expenditures made within Vermont count toward the credit, even where the federal definition would include work done elsewhere.
• Same expense definition as federal. The credit rests on the federal Section 41 credit, so the qualified research that supports your federal claim supports the Vermont credit, limited to the Vermont-performed portion.
• Nonrefundable, with carryforward. The credit offsets Vermont tax. It is not refundable, but unused credit carries forward for up to 10 years.
• Public disclosure. Each year, by January 15, the Vermont Department of Taxes publishes the names of taxpayers who claimed the credit. It is worth knowing that claiming the credit is a matter of public record in Vermont.

The credit is claimed with the Vermont return under 32 V.S.A. section 5930ii.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder is what supports your federal Form 6765 and, starting tax year 2026, the mandatory Form 6765 Section G appendix. Because Vermont's credit is a percentage of that federal credit, the binder is most of the Vermont work too.

The Vermont state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• The Vermont-eligible share of your federal Section 41 credit, tied to research conducted in Vermont, using the same business-component partition as the federal binder.
• The credit computed at 27 percent of that Vermont-eligible federal credit.
• A usage note: the 10-year carryforward, so your CPA can plan how the credit is absorbed.
• Filing notes for your CPA: which Vermont return and schedule the credit attaches to, plus a note that Vermont publishes the names of credit claimants each year.

We do not file the Vermont return or sign it. That stays with your CPA, the same way federal Form 6765 does. R&D Binder produces the workpaper; your CPA files.

If you operate in more than one state, additional state workpapers are $995 each. Most states with an R&D credit track the federal QRE definition closely, so the marginal cost per state is low once the federal binder is complete.

A worked example. A Burlington SaaS company with 12 engineers, most of its research done in Vermont, and a federal Section 41 credit of $90,000 for the year computed on Form 6765.

• Federal Section 41 credit. The $90,000 federal credit is claimed by the CPA on Form 6765. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• Vermont credit. Say 75 percent of the research is conducted in Vermont, so the Vermont-eligible federal credit is about $67,500. At 27 percent, the Vermont credit is roughly $18,000. No separate base calculation is needed; it is a percentage of the federal credit.
• Nonrefundable, carried forward. The credit offsets Vermont tax. A profitable company uses it; a pre-profit company carries the unused amount forward up to 10 years.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus the Vermont state workpaper add-on ($995). Total $5,990.

The federal credit amount and the Vermont share are specific to each company; the numbers above are illustrative. The CPA files both returns. R&D Binder never appears on the federal or Vermont return.

If the Vermont Department of Taxes examines a return on which the research credit was claimed, the substantiation expected is the same kind the IRS expects under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, and qualified research expense allocation, plus support that the research was conducted in Vermont. Because the Vermont credit rests directly on the federal credit, the federal binder is the core of the support. The Vermont workpaper adds the in-state portion.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for a Vermont Department of Taxes examination is a separate scope at $250 per hour, scoped per incident. We do not represent before the Department; that remains your CPA's responsibility or your tax controversy attorney's.

• 32 V.S.A. section 5930ii (Research and development tax credit), the 27 percent rate tied to the federal Section 41 credit for research made within Vermont, the 10-year carryforward, and the annual publication of claimant names by January 15. Vermont General Assembly.
• Vermont Department of Taxes, business income tax credit guidance and the schedule on which the research and development credit is claimed.
• IRS Form 6765 (federal Credit for Increasing Research Activities) and Internal Revenue Code Section 41, the federal credit Vermont's credit is a percentage of.

This page is general informational content, not tax advice for any specific taxpayer. The Vermont credit is administered by the Vermont Department of Taxes. The rate, the carryforward, and the public-disclosure requirement reflect 32 V.S.A. section 5930ii as of June 2026. Legislation to change the rate has been discussed; confirm the current rate and any pending changes with your CPA or the Department before filing.

• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• California R&D credit
• Idaho R&D credit
• Illinois R&D credit
• Indiana R&D credit