Short answer. Vermont's research credit is 27 percent of the federal Section 41 credit for research conducted in Vermont, one of the highest federal-piggyback rates in the country. There is no separate state base, the credit is non-refundable with a 10-year carryforward, and Vermont publishes the names of claimants each year.
Key facts
| Rate | 27% of the federal Section 41 credit |
|---|---|
| Base | None (piggybacks the federal credit) |
| Refundable | No |
| Carryforward | 10 years |
| Statute | 32 V.S.A. 5930ii |
27 percent of your federal credit
Vermont does not compute a separate credit; it takes a slice of your federal one.
The credit is 27 percent of the federal Section 41 credit allowed for research and development conducted in Vermont. There is no separate Vermont base amount to calculate. Once your federal credit is set, the Vermont credit is 27 percent of the portion attributable to Vermont research, which makes it one multiplication.
At 27 percent, it is one of the highest federal-piggyback rates in the country. Nebraska, by comparison, piggybacks at 15 percent. Only research and development performed within Vermont counts, even where the federal definition would reach work done elsewhere.
Non-refundable, with a 10-year carryforward
The rate offsets Vermont tax and banks what you cannot use.
The credit is non-refundable. It reduces Vermont tax, and any unused amount carries forward up to 10 years. The expense definition rests on federal Section 41, so the qualified research that supports your federal claim supports the Vermont credit, limited to the Vermont-performed portion. It is claimed on the Vermont return under 32 V.S.A. 5930ii.
One quirk: it is public
Claiming the Vermont credit puts you on a published list.
Each year, by January 15, the Vermont Department of Taxes publishes the names of taxpayers who claimed the credit. It does not change the rate or the amount, but it is worth knowing that claiming the Vermont credit is a matter of public record.
More on Vermont's R&D credit
The full state overview, the federal Section 41 work it builds on, and related state guides:
Sources
Every claim on this page traces to a primary authority. Each source below is independent and verifiable.
- 32 V.S.A. 5930ii (research and development tax credit) - Vermont General Assembly
- 26 U.S.C. ยง 41 (credit for increasing research activities) - Cornell Law School, Legal Information Institute
- IRS, About Form 6765 - Internal Revenue Service
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder and the Vermont state workpaper from one engagement, both built to survive an exam.