The Vermont Payments section is used to report certain payments, withholding amounts, and refund elections that can reduce your Vermont tax liability or increase your refund.
If any of the situations below apply to you, enter the applicable amount in the Vermont Payments section of your Vermont return.
Real Estate Withholding
If you sold real estate located in Vermont and Vermont income tax was withheld from the sale proceeds, you may claim that withholding as a payment on your Vermont return.
Enter the amount of Vermont tax withheld as shown on:
- Form RW-171, VT Withholding Tax Return for Transfer of Real Property
- Schedule A, Line 12
This withholding is treated as a tax payment and is applied against your Vermont income tax liability.
Who should enter Real Estate Withholding?
You should enter an amount if:
- You sold Vermont real estate during the tax year, and
- The buyer withheld Vermont income tax from the sales price.
Keep a copy of Form RW-171 and your closing documents with your tax records.
Nonresident Shareholder Payments
Partnerships, LLCs, and S corporations may make Vermont estimated income tax payments on behalf of nonresident owners.
Enter any Vermont income tax payments made on your behalf by a:
- Partnership
- Limited Liability Company (LLC)
- S Corporation
These payments are reported to the owner and may reduce the amount of Vermont tax owed or increase the refund due.
Where can I find this information?
This information is generally reported on Vermont schedules, K-1s, or other tax documents provided by the business entity.
Apply Your Refund to 2027 Estimated Tax Payments
If you're due a Vermont refund, you can choose to apply all or part of that refund to your next year's Vermont estimated tax payments.
Instead of receiving that portion as part of your refund, Vermont will apply it as a credit toward your future income tax liability.
Why choose this option?
Applying your refund to next year's estimated taxes may help if you:
- Expect to owe Vermont tax next year.
- Make quarterly estimated tax payments.
- Want to reduce future tax payments.
Important
The amount applied cannot exceed your available Vermont refund.
If your refund is reduced during processing, Vermont may adjust the amount available to carry forward to estimated taxes.
Apply Your Refund to Your 2027 Property Tax Bill
Vermont also allows eligible taxpayers to apply a portion of their state income tax refund toward a future Vermont property tax bill.
Rather than receiving the amount as part of your refund, the designated amount is applied toward your property tax obligation.
This option can be useful for homeowners who anticipate a property tax bill and would prefer to use part of their state refund to offset that expense.
Important
The combined amount you choose to apply toward:
- 2027 estimated tax payments, and
- Your 2027 property tax bill
cannot be more than your available Vermont refund.
If you owe Vermont tax or your final refund is less than the amount elected, Vermont may reduce the amount that can be applied.
How Do I Enter Vermont Payments?
- From the State section of your return, select Vermont.
- Select Payments.
- Enter any applicable amounts for:
- Real Estate Withholding
- Nonresident Shareholder Payments
- Amount of refund to apply to 2027 Estimated Tax Payments
- Amount of refund to apply to your 2027 Property Tax Bill
- Continue through the Vermont interview to complete your return.
What Records Should I Keep?
Keep documentation supporting any payment amounts claimed on your Vermont return, including:
- Form RW-171 and related real estate closing documents
- Vermont Schedule K-1s and other pass-through entity statements
- Records of estimated tax payments made on your behalf
- Documentation showing how you elected to apply your refund
Keeping these records with your tax documents can help if the Vermont Department of Taxes requests additional information about a payment or withholding amount reported on your return.