State & Local Tax Impacts of COVID-19 for Vermont – 2020

Thoughtware Alert Published: Dec 11, 2020 | Updated: May 05, 2021

Information current as of December 31, 2020.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Vermont

  • Vermont announced that the filing and payment due dates for the following Vermont taxes have been extended from April 15 to July 15, 2020: corporate income tax, personal income tax, homestead declarations and property tax claims, and fiduciary income tax. This includes any tax year 2020 estimated payments that were due for these taxes on April 15, 2020. Furthermore, taxpayers who are unable to meet the March 25 and April 25 sales and use tax deadlines will not be charged any penalty or interest on these taxes for late submissions.
    • Vermont DOR Press Release, March 23, 2020.
  • Vermont is providing a waiver of penalties and interest for late submission of meals and rooms tax or sales/use tax for taxpayers unable to meet the March 25 and April 25 filing deadlines; and 2) allowing restaurants to sell alcoholic beverages as takeout service.
    • Governor’s Office Announcement, March 26, 2020.
  • Vermont updated its relief extensions to include the application of the July 15 extended deadline to personal income estimated taxes and the June 15 due date for Q2 estimated tax returns and payments.
    • Vermont DOR Notice, April 1, 2020.
  • Vermont has extended the filing date for the International Fuel Tax Agreement first-quarter Vermont motor fuels tax return from April 30, 2020, to May 26, 2020, with full waiver of interest or penalties.
    • Vermont Department of Motor Vehicles Announcement, April 28, 2020.
  • Vermont updated its relief extensions to include the application of the July 15 extended deadline to personal, corporate, business/pass-through, fiduciary, and estate estimated taxes originally due June 15, with full waiver of penalty and interest.
    • Vermont DOR Notice, April 1, 2020.
  • Vermont previously announced relief for estimated income taxes due April 15, 2020, as long as they were paid by July 15, 2020. The new announcement extends relief for any tax year 2020 estimated income tax payments due on April 15 and before July 15 to be payable by July 15 without any penalty or interest.
    • Vermont DOR Notice, May 19, 2020.
  • Vermont requires a nonresident temporarily living and working in the state to pay Vermont income taxes on the income earned while living and performing work in the state. This is true even if the individual is in Vermont because of the COVID-19 pandemic, and it applies regardless of whether the employer is located inside or outside of the state. For businesses that have remote workers located in Vermont only on a temporary basis, Vermont won’t require the business to change the employee’s withholding state.
    • Vermont DOR FAQs, June 15, 2020.
  • Vermont issued individual income tax guidance for remote or relocated workers during the COVID-19 pandemic. Individuals are subject to Vermont income tax under two circumstances: 1) they are residents of Vermont, either by domicile or presence in the state for more than 183 days; or 2) they earn Vermont income. If a taxpayer is present in Vermont for more than two weeks, income earned while in Vermont is subject to income tax in Vermont. The guidance addresses applicability of Vermont individual income tax on various scenarios that taxpayers are finding themselves in during the COVID-19 pandemic.
    • Vermont DOR News Release, November 24, 2020.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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