The Vermont Statutes Online

Title 32 : Taxation and Finance

Chapter 154 : Homestead Property Tax Credit and Renter Credit

• § 6061. Definitions

  As used in this chapter unless the context requires otherwise:

  (1) “Property tax credit” means a credit of the prior tax year’s statewide or municipal property tax liability or a homestead owner credit, as authorized under section 6066 of this title, as the context requires.

  (2) [Repealed.]

  (3)(A) “Household” means, for any individual and for any taxable year, the individual and such other persons as resided with the individual in the principal dwelling at any time during the taxable year.

  (B) The following shall not be considered members of the household:

  (i) a person who is not related to any member of the household and who is residing in the household under a written homesharing agreement pursuant to a nonprofit homesharing program;

  (ii) a person residing in the household who was granted humanitarian parole to enter the United States pursuant to 8 U.S.C. § 1182(d)(5), who is seeking or has been granted asylum pursuant to 8 U.S.C. § 1158, or who qualifies as a refugee pursuant to 8 U.S.C. § 1101(a)(42), provided the person is not eligible under the laws of the United States to apply for adjustment of status to lawful permanent resident; or

  (iii) a person residing in a household who is hired as a bona fide employee to provide personal care to a member of the household and who is not related to the person for whom the care is provided.

  (4)(A) “Household income” means modified adjusted gross income, but not less than zero, received in a calendar year by:

  (i) all persons of a household while members of that household; and

  (ii) the spouse of the claimant who is not a member of that household and who is not legally separated from the claimant in the taxable year as defined in subdivision (9) of this section, unless the spouse is at least 62 years of age and has moved to a nursing home or other care facility with no reasonable prospect of returning to the homestead.

  (B) “Household income” does not mean:

  (i) the modified adjusted gross income of the spouse or former spouse of the claimant for any period that the spouse or former spouse is not a member of the household, if the claimant is legally separated or divorced from the spouse in the taxable year as defined in subdivision (9) of this section; or

  (ii) the modified adjusted gross income of the spouse of the claimant, if the spouse is subject to a protection order as defined in 15 V.S.A. § 1101(5) that is in effect at the time the claimant reports household income to the Department of Taxes.

  (5) “Modified adjusted gross income” means “federal adjusted gross income”:

  (A) Before the deduction of any trade or business loss from a sole proprietorship, loss from a partnership, loss from a limited liability company or “subchapter S” corporation, loss from a rental property, or capital loss, except that in the case of a business that sells a business property with respect to which it is required, under the Internal Revenue Code, to report a capital gain, a business loss incurred in the same tax year with respect to the same business may be netted against such capital gain, and except that a business loss from a sole proprietorship may be netted against a business gain from a sole proprietorship, as long as the loss and the gain are incurred in the same tax year with respect to different business.

  (B) With the addition of the following, to the extent not included in adjusted gross income: alimony, support money other than gifts, gifts received by the household in excess of a total of $6,500.00 in cash or cash-equivalents, cash public assistance and relief (not including relief granted under this subchapter), cost of living allowances paid to federal employees, allowances received by dependents of servicemen and women, the portion of Roth IRA distributions representing investment earnings and not included in adjusted gross income, railroad retirement benefits, payments received under the federal Social Security Act, all benefits under Veterans’ Acts, federal pension, and annuity benefits not included in adjusted gross income, nontaxable interest received from the state or federal government or any of its instrumentalities, workers’ compensation, the gross amount of “loss of time” insurance, and the amount of capital gains excluded from adjusted gross income, less the net employment and self-employment taxes withheld from or paid by the individual (exclusive of any amounts deducted to arrive at adjusted gross income or deducted on account of excess payment of employment taxes) on account of income included under this section, less any amounts paid as child support money if substantiated by receipts or other evidence that the Commissioner may require.

  (C) Without the inclusion of: any gifts from nongovernmental sources other than those described in subdivision (B) of this subdivision (5), surplus food or other relief in kind supplied by a governmental agency, or the first $6,500.00 of income earned by a full-time student who qualifies as a dependent of the claimant under the federal Internal Revenue Code, the first $6,500.00 of income received by a person who qualifies as a dependent of the claimant under the Internal Revenue Code and who is the claimant’s parent or adult child with a disability, any income attributable to cancellation of debt, or payments made by the State pursuant to 33 V.S.A. chapters 49 and 55 for foster care, or payments made by the State or an agency designated in 18 V.S.A. § 8907 for adult foster care or to a family for the support of a person who is eligible and who has a developmental disability. If the Commissioner determines, upon application by the claimant, that a person resides with a claimant who has a disability or was at least 62 years of age as of the end of the year preceding the claim, for the primary purpose of providing attendant care services as defined in 33 V.S.A. § 6321 or homemaker or companionship services, with or without compensation, which allow the claimant to remain in his or her home or avoid institutionalization, the Commissioner shall exclude that person’s modified adjusted gross income from the claimant’s household income. The Commissioner may require that a certificate in a form satisfactory to him or her be submitted that supports the claim.

  (D) Without the inclusion of adjustments to total income except certain business expenses of reservists, one-half of self-employment tax paid, alimony paid, deductions for tuition and fees, health insurance costs of self-employed individuals, and health savings account deductions.

  (E) With the addition of an asset adjustment of 1 times the sum of interest and dividend income included in household income above $10,000.00 for claimants under age 65, regardless of whether that dividend or interest income is included in federal adjusted gross income.

  (6) “Property tax” means the amount of ad valorem taxes, exclusive of special assessments, interest, penalties, and charges for service, assessed on real property in this State used as the claimant’s housesite, or that would have been assessed if the homestead had been properly declared at the time of assessment.

  (7)(A) “Allocable rent” means, for any housesite and for any taxable year, 21 percent of the gross rent.

  (B) “Gross rent” means the rent actually paid during the taxable year by the claimant solely for the right of occupancy of the housesite during the taxable year.

  (C) “Fair market rent” means the monthly fair market rent for the area in which the claimant resides as determined by the U.S. Department of Housing and Urban Development pursuant to 42 U.S.C. § 1437f as of June 30 of the taxable year multiplied by 12, provided that for claimants who reside in Franklin or Grand Isle county, “fair market rent” means the average of the fair market rents for the State as determined by the U.S. Department of Housing and Urban Development.

  (8) “Annual tax levy” means the property taxes levied on property taxable on April 1 and without regard to the year in which those taxes are due or paid.

  (9) “Taxable year” means the calendar year preceding the year in which the claim is filed.

  (10) [Repealed.]

  (11) “Housesite” means that portion of a homestead, as defined under subdivision 5401(7) of this title but not under subdivision 5401(7)(G) of this title, that includes as much of the land owned by the claimant surrounding the dwelling as is reasonably necessary for use of the dwelling as a home, but in no event more than two acres per dwelling unit, and, in the case of multiple dwelling units, not more than two acres per dwelling unit up to a maximum of 10 acres per parcel.

  (12) “Claim year” means the year in which a claim is filed under this chapter.

  (13) “Homestead” means a homestead as defined under subdivision 5401(7) of this title, but not under subdivision 5401(7)(G) of this title, and declared on or before October 15 in accordance with section 5410 of this title.

  (14) “Statewide education tax rate” means the homestead education property tax rate multiplied by the municipality’s education spending adjustment under subdivision 5402(a)(2) of this title and used to calculate taxes assessed in the municipal fiscal year that began in the taxable year.

  (15) “Adjusted property tax” means the amount of education and municipal property taxes on the homestead parcel after reduction for any property tax credit under section 6066a of this chapter.

  (16) “Unadjusted property tax” means the amount of education and municipal property taxes on the homestead parcel before any reduction for a property tax credit under section 6066a of this chapter.

  (17) “Equalized value of the housesite in the taxable year” means the value of the housesite on the grand list for April 1 of the taxable year, divided by the municipality’s common level of appraisal determined by equalization of the grand list for April 1 of the year preceding the taxable year.

  (18) Notwithstanding subdivisions (4) and (5) of this section, for the purposes of the renter credit, “income” means federal adjusted gross income increased by the following:

  (A) trade or business loss from a sole proprietorship, loss from a partnership, loss from a limited liability company or “subchapter S” corporation, loss from a rental property, capital loss, loss from an estate or trust, loss from a real estate mortgage investment conduit, farm rental loss, any loss associated with the sale of business property, and farm losses included in adjusted gross income;

  (B) exempt interest received or accrued during the taxable year;

  (C) 75 percent of the portion of Social Security benefits as defined under 26 U.S.C. § 86(d) that is excluded from gross income under 26 U.S.C. § 86 for the taxable year; and

  (D) to the extent excluded from federal adjusted gross income, educator expenses; certain business expenses of reservists, performing artists, and fee-basis government officials; health savings account deductions; moving expenses for members of the U.S. Armed Forces; the deductible part of self-employment tax; self-employed SEP, SIMPLE, and qualified plan deductions; self-employed health insurance deductions; the penalty for early withdrawal of savings; alimony paid; certain IRA retirement savings deductions; student loan interest deductions; and tuition and fees deductions.

  (19) “Extremely low-income limit” means the limit as determined by the U.S. Department of Housing and Urban Development pursuant to 42 U.S.C. § 1437a as of June 30 of the taxable year, provided that for claimants who reside in Franklin or Grand Isle county, “extremely low-income limit” means the average of the extremely low-income limits for the State as determined by the U.S. Department of Housing and Urban Development.

  (20) “Very low-income limit” means an amount of income 1.3 times the amount of the income limit for very low-income families as determined by the U.S. Department of Housing and Urban Development pursuant to 42 U.S.C. § 1437a as of June 30 of the taxable year, provided that for claimants who reside in Franklin or Grand Isle County, “very low-income limit” means 1.3 times the average of the very low-income limits for the State as determined by the U.S. Department of Housing and Urban Development. (Added 1997, No. 60, § 51, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 15, eff. Jan. 1, 1998; 1999, No. 49, §§ 9, 15, eff. June 2, 1999; 2001, No. 63, § 163b; 2001, No. 144 (Adj. Sess.), § 15, eff. June 21, 2002; 2003, No. 68, §§ 8, 9, eff. June 18, 2003; 2003, No. 68, § 7, eff. July 1, 2004; 2003, No. 76 (Adj. Sess.), §§ 4, 15, 16, eff. Feb. 17, 2004; 2005, No. 38, § 7, eff. Jan. 1, 2006; 2005, No. 38, § 12, eff. June 2, 2005; 2005, No. 38, § 18; 2005, No. 94 (Adj. Sess.), § 7, eff. March 8, 2006; 2005, No. 185 (Adj. Sess.), §§ 1, 7, 13; 2007, No. 33, § 9, eff. May 18, 2007; 2007, No. 37, § 3; 2007, No. 65, § 292, eff. June 4, 2007; 2009, No. 160 (Adj. Sess.), §§ 23, 24, 51; 2011, No. 45, § 13, eff. Jan. 1, 2012; 2011, No. 143 (Adj. Sess.), §§ 10, 26, 31a, eff. Jan. 1, 2013; 2013, No. 96 (Adj. Sess.), § 197; 2015, No. 134 (Adj. Sess.), § 16, eff. May 25, 2016; 2019, No. 51, §§ 23, 30; 2019, No. 160 (Adj. Sess.), § 1, eff. Jan. 1, 2021; 2021, No. 96 (Adj. Sess.), § 1, eff. January 1, 2021; 2021, No. 105 (Adj. Sess.), § 552, eff. July 1, 2022; 2023, No. 144 (Adj. Sess.), § 5, eff. June 3, 2024.)