Non-Resident Income Tax while working in Vermont

Forum|Forum|1 year ago
January 28, 2025
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I live in Connecticut and work 100% in Vermont. My Employer takes income tax out of my check for VT but nothing for CT. Should I be paying tax to VT as a non-resident and if so am I then exempt from paying income tax to CT even though I live there?

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KrisD15

You will need to file a state tax return for Connecticut since you are a resident.

CT residents are taxed on all their income, including income they earn in a different state.

Connecticut also give a credit for taxes paid to another state. So although you will be claiming the same income twice, once for the state you live in and once for the state you work in, you will get a credit on your Connecticut return for the tax you pay to Vermont.

Do the Vermont return first because the credit is not based on what was withheld, but on the final tax liability calculated on the Vermont return.

Next, do the Connecticut return. The Connecticut tax and credit will be calculated on that return.

Vermont has a higher tax rate, so the credit should zero-out any tax due (on that same income), or at least come pretty close.

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edp01170Author

Thank you for your help!! This is exactly the information I needed to file this years tax return. You've given me above and beyond any information I expected to get from posing this question! I appreciate you unbounded!!