About Education Taxes
Click here for an overview created by the Vermont Department of Taxes.
Vermont Department of Taxes Education Tax Rate Calculations | Frequently Asked Questions
A Homestead Declaration, Form HS-122, must be filed each year by any Vermont resident who owns their property and will occupy it as their domicile in the coming year. Once the residence is declared as a homestead, it is taxed at the homestead education tax rate (rather than the nonhomestead tax rate). Resident households with 2022 income under $134,800 may be eligible for a property tax credit and should complete section B of the HS-122 and the HI-144, Household Income Schedule, to claim a property tax credit. The property tax credit claim compares education property taxes for FY23 against the town’s household income percentage which is calculated from its per pupil spending. If education property taxes exceeded that percentage of income, the difference (with some limitations) will be applied as a credit to the FY24 property tax bill, reducing the total amount due. About two-thirds of all resident homeowners in Vermont receive an income-based property tax credit each year.
Households with income less than $47,000 are eligible for additional credits that compare their remaining education property taxes (with some limitations) after the first credit is applied against fixed statutory percentages of income, and the difference is added to their education tax credit. 32 V.S.A. §6066(a). Those households are also eligible for a municipal property tax credit which compares their municipal property taxes paid to fixed statutory percentages of income.
The maximum education property tax credit is $5,600 and the maximum municipal property tax credit is $2,400. Income-based municipal credits appear in the “Municipal Taxes” column of the bill as a “Municipal State Payment” and income-based education credits appear in the “Education Taxes” column of the bill as “Education State Payment.”