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Home Energy Tax Credit in Vermont 2026

Calculate your home energy tax credit tax savings in Vermont. With Vermont's 8.75% top state tax rate, your combined savings are higher.

Vermont Tax Overview

State Income Tax
8.75%
progressive
Sales Tax
6%
avg combined: 6.24%
Property Tax Rate
1.83%
Median Income
$63,477

Four brackets to 8.75%. High property taxes (1.83%). Estate tax ($5M). VT business/farm capital gains exclusion.

Vermont Income Tax Brackets (Single)

3.35%
$0 - $45,400
6.6%
$45,400 - $110,050
Your bracket
7.6%
$110,050 - $229,550
8.75%
$229,550 +
$3,200
Est. Total Savings
$3,200
Max Deduction
Tax Credit
Deduction Type
28.6%
Combined Tax Rate

Home Energy Tax Credit Savings Calculator for Vermont

$
$

Federal Savings

$3,200

22% bracket

Vermont State

$0

6.6% rate

Total Savings

$3,200

28.6% combined

Tax credits reduce your tax bill dollar-for-dollar, regardless of your tax bracket.

Savings by Tax Bracket in Vermont

10%
$5,000
12%
$5,000
22%
$5,000
24%
$5,000
32%
$5,000
35%
$5,000
37%
$5,000

Includes 6.6% Vermont state tax on top of federal savings.

Eligibility Requirements

Homeowners who install energy-efficient improvements

  • 1Must be primary residence
  • 2Qualifying improvements only
  • 3Keep receipts

Vermont residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 8.75%.

Common Mistakes to Avoid

  • !Claiming for rental properties
  • !Missing manufacturer certifications
  • !Forgetting to claim the deduction on your Vermont state return (missing up to 8.75% additional savings)

Vermont Filing Tips

High rates make pre-tax contributions important. Use 40% capital gains exclusion on VT business/farm sales. EITC at 38% of federal. Homeowner and Renter Rebate programs offset property taxes.

Required Tax Forms

Form 5695

File these forms with your federal tax return to claim the home energy tax credit. Vermont may require additional state-specific forms.

Other Tax Deductions in Vermont

Mortgage Interest Deduction

Housing

~$4,550
est. savings

Property Tax Deduction

Housing

~$2,860
est. savings

Home Office Deduction

Housing

~$1,560
est. savings

Residential Solar Tax Credit

Housing

~$7,500
est. savings

Military Moving Expenses

Housing

~$5,200
est. savings

PMI Premium Deduction

Housing

~$1,430
est. savings

Mortgage Points Deduction

Housing

~$2,600
est. savings

Casualty & Theft Loss Deduction

Housing

~$6,500
est. savings

Home Energy Tax Credit in Neighboring States

New Hampshire

No state income tax

~$1,800
-1,400 vs Vermont

Massachusetts

5% top rate (flat)

~$1,800
-1,400 vs Vermont

New York

10.9% top rate (progressive)

~$1,800
-1,400 vs Vermont

Calculate Your Full Tax Savings in Vermont

Use our free tax calculators to optimize your entire tax return for Vermont.

Income Tax CalculatorVermont Income TaxFull Home Energy Tax Credit Guide

Frequently Asked Questions

How much can I save with the Home Energy Tax Credit in Vermont?

In Vermont, the home energy tax credit can save you an estimated $3,200 per year on a $5,000 deduction. This includes $3,200 in federal tax savings and $0 in Vermont state tax savings at the 6.6% marginal rate. The national average savings is $1,800/year.

What is the Vermont state income tax rate?

Vermont has a progressive income tax system with a top rate of 8.75%. Four brackets to 8.75%. High property taxes (1.83%). Estate tax ($5M). VT business/farm capital gains exclusion.

Who qualifies for the Home Energy Tax Credit in Vermont?

Homeowners who install energy-efficient improvements. The eligibility requirements are the same whether you live in Vermont or another state, as this is a federal tax credit. However, your total savings will vary based on Vermont's 8.75% top state tax rate.

What tax forms do I need to claim the Home Energy Tax Credit in Vermont?

To claim the home energy tax credit, you need to file Form 5695 with your federal return. Vermont residents should also check if the state allows this deduction on their state return for additional savings of up to 8.75%. Filing status affects your deduction limits and tax bracket.

Is the Home Energy Tax Credit better in Vermont than in states without income tax?

Yes, Vermont residents benefit more because the state's 8.75% top income tax rate means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 28.6% means more savings per dollar deducted.

What is the standard deduction in Vermont for 2026?

Vermont's standard deduction is $7,000 for single filers and $14,050 for married filing jointly. High rates make pre-tax contributions important. Use 40% capital gains exclusion on VT business/farm sales. EITC at 38% of federal. Homeowner and Renter Rebate programs offset property taxes.

Related Calculators

Mortgage Interest Deduction in Vermont

Avg savings: $3,500/year

Property Tax Deduction in Vermont

Avg savings: $2,200/year

Home Office Deduction in Vermont

Avg savings: $1,200/year

Residential Solar Tax Credit in Vermont

Avg savings: $7,500/year

Military Moving Expenses in Vermont

Avg savings: $4,000/year

PMI Premium Deduction in Vermont

Avg savings: $1,100/year