Vermont Renter Credit

Quick Facts

• Benefit type: A refundable tax credit administered through the Vermont Department of Taxes to reimburse part of rent for qualified households.
• Who can claim: Vermont residents who rented their primary home for at least six months during the calendar year, meet income and asset limits, and file a Vermont return or renter credit claim.
• Maximum credit: Up to $3,500, calculated using a formula that compares rent constituting 21% of income for seniors/disabled renters and 30% for others.
• How to claim: File the Renter Credit Claim (Form RCC) electronically through myVTax or by paper alongside your Vermont income tax return.
• When paid: Refunds are issued via direct deposit or check, typically within eight weeks of filing.

Program Overview

Vermont’s Renter Credit, formerly known as the Renter Rebate, is one of the nation’s most comprehensive renter relief benefits. It helps offset the housing cost burden for low- and moderate-income renters by comparing their actual rent to a percentage of household income. Since 2022, Vermont shifted from the Circuit Breaker formula to a simplified calculation tied to gross rent, making the program easier to understand.

The credit recognizes that renters indirectly pay property taxes through rent. By providing a cash refund, Vermont enables households to cover heating fuel, groceries, childcare, or savings goals. The credit is especially valuable in ski towns and college communities where rents soar above the statewide average.

Eligibility Requirements

To qualify, you must satisfy several criteria around residency, rental status, income, assets, and documentation.

1. Residency and rental duration: You must have rented a Vermont residence for at least six months (need not be consecutive) during the calendar year. The home must be your principal dwelling. Short-term vacation rentals or sublets of less than 30 days do not qualify.
2. Lease arrangement: You can be a named tenant or hold a verbal lease if you can prove payment. Cooperative housing members may qualify if they pay carrying charges equivalent to rent. Residents of mobile home parks can include lot rent.
3. Income limits: Vermont uses “household income,” which includes Vermont adjusted gross income plus Social Security, unemployment, workers’ compensation, child support received, and cash public assistance. For 2024 claims, household income must generally be below $60,000, though seniors and people with disabilities have slightly higher thresholds. Income is calculated for every adult in the household, including roommates and non-relatives.
4. Assets: Liquid assets (cash, savings, investments) must be below $250,000. Retirement accounts are excluded until withdrawn. Homeownership disqualifies you unless you sold your home and rented for at least six months.
5. Citizenship/immigration: There is no citizenship requirement; ITIN filers and undocumented renters can claim if they meet residency and income rules.
6. Age/disability: Not required, but seniors (62+) and individuals receiving Social Security disability or Supplemental Security Income benefit from a lower rent threshold (21% of income instead of 30%).

Non-qualifying situations

• You lived in college dorms, nursing homes, or correctional facilities where payment is not considered rent.
• Rent was paid entirely by a subsidy and you contributed nothing (e.g., 100% covered by a housing voucher). If you pay a portion, you can claim that amount.
• You claimed the Homestead Declaration and received the Property Tax Credit as a homeowner for part of the year without renting six months.

Benefit Calculation

The credit compares your allocable rent to a percentage of household income.

1. Determine household income.
2. Calculate total rent paid. For shared households, use the portion you paid. Vermont requires landlord certification to verify gross rent.
3. Multiply household income by the applicable percentage:
   • 21% for seniors (62+) and disabled claimants.
   • 30% for all other renters.
4. Subtract this threshold from your total rent. The result, capped at $3,500, is your credit.

Example scenarios

• Single renter: Casey, age 28, paid $16,800 in rent ($1,400/month) with $42,000 household income. Threshold = $42,000 × 30% = $12,600. Credit = $16,800 − $12,600 = $4,200, capped at $3,500.
• Senior renter: Maria, age 70, lives alone paying $900/month ($10,800 annually) with $28,000 income. Threshold = $28,000 × 21% = $5,880. Credit = $10,800 − $5,880 = $4,920; capped at $3,500.
• Roommates: Two friends share an apartment costing $2,200/month. Jordan earns $33,000, Alex earns $24,000. Each pays half the rent ($13,200 annually). Household income for each claim is their individual income (the state treats each renter separately if they file separate claims). Jordan’s threshold = $33,000 × 30% = $9,900; credit = $13,200 − $9,900 = $3,300. Alex’s threshold = $7,200; credit = $13,200 − $7,200 = $6,000, capped at $3,500.

Application Process

1. Create a myVTax account: Electronic filing is strongly encouraged. Visit myVTax to register.
2. Collect landlord certificate: Landlords must complete Form RCC-146, certifying total rent received, utilities included, and months occupied. Request it early—landlords must provide it by January 31.
3. Compile income documentation: Gather W-2s, 1099s, Social Security statements, unemployment forms, child support records, and any other income proof. Include income for every adult in the household.
4. Complete Form RCC: The online form walks you through entering household information, income, months rented, and rent amounts. Ensure you enter rent for each month separately if amounts changed.
5. Submit with tax return or as stand-alone claim: If you file a Vermont income tax return, include the renter credit schedule. If not required to file, submit Form RCC by itself before the April deadline.
6. Choose refund method: Provide bank account information for direct deposit or request a paper check. Direct deposit arrives faster.
7. Track status: Use myVTax to monitor processing. If the Department requests more information, respond within 30 days.

Required Documentation Checklist

• Landlord Certificate RCC-146 or electronic equivalent.
• Lease agreement or rent receipts, especially if rent changed mid-year.
• Proof of payment (canceled checks, bank statements) if landlord certification is unavailable or contested.
• Verification of household income for all occupants (W-2, 1099, SSA-1099, benefits statements).
• Proof of disability or age if claiming the 21% threshold (SSA award letter, physician certification).
• Documentation of subsidies (Section 8 statements) showing your share of rent.

Deadlines, Extensions, and Amendments

• Filing deadline: Aligns with the federal deadline, typically April 15. Vermont extends automatically if the IRS extends.
• Late claims: Vermont accepts late renter credit claims until October 15 if you file Form IN-151 (extension). Payment of tax due is still required by April.
• Amended claims: You may amend within three years of the original deadline to correct rent or income figures. File Form IN-111 with a revised RCC schedule.

Interaction with Other Programs

• 3SquaresVT (SNAP) and Reach Up (TANF): Renter credit refunds are generally excluded as income if spent within 12 months, but report them if asked.
• Fuel Assistance: Use the renter credit to pay winter heating bills. It does not reduce eligibility for the Low Income Home Energy Assistance Program (LIHEAP).
• Homestead Declaration: Renters do not file the Homestead Declaration unless they also owned a home. Filing both can trigger processing delays.
• Property Transfer: If you bought a home mid-year and rented earlier, you can still claim provided you rented at least six months and did not receive the homeowner Property Tax Credit for that year.

Strategies for Success

1. Request landlord certificates early. Vermont landlords are legally obligated to provide them, but delays are common. Put requests in writing and document follow-up efforts.
2. Log rent payments monthly. Maintain a spreadsheet or folder with receipts. Vermont may request evidence if reported rent seems high relative to market rates.
3. Coordinate with roommates. Each roommate can file separately, but ensure reported rent shares add up to the total rent certified by the landlord.
4. Use free tax preparation. VITA/TCE and the Champlain Valley Office of Economic Opportunity offer specialized assistance for the renter credit.
5. Plan for next year. If your income is trending upward and may exceed the limit, consider other Vermont housing programs like the Vermont Housing Improvement Program or local trust funds.

Common Errors to Avoid

• Using gross rent including ineligible utilities. Only rent and mandatory fees count. Charges for cable, parking, or optional storage must be excluded unless required in the lease.
• Reporting household income incorrectly. Include nontaxable benefits. Vermont cross-checks with federal and state databases.
• Missing the six-month requirement. Partial-year renters who move out of state before hitting six months cannot claim.
• Neglecting to update address. Provide your current mailing address even if you moved after the tax year to ensure refund delivery.
• Ignoring Department notices. Respond promptly to avoid denial. Notices often request clarification on rent discrepancies.

Real-Life Case Studies

• Family with subsidy: The Lopez family pays $1,200 monthly rent, of which $900 is covered by a Section 8 voucher. Their out-of-pocket share is $300/month ($3,600 annually). Household income is $28,000. Threshold = $8,400. Since rent ($3,600) is below the threshold, no credit is due. This demonstrates how the formula focuses on rent burden relative to income.
• Young professional roommates: Three roommates pay $2,700 monthly rent, split evenly. Each claims $900/month. One roommate exceeds the income limit and cannot claim; the others still qualify, but their credits are limited by their share.
• Senior with disability: Harold, age 68, receives SSDI and rents a mobile home lot for $450/month plus $350 lot rent. Total rent = $9,600. Income = $25,000. Threshold = $5,250 (21%). Credit = $4,350, capped at $3,500. Harold directs the refund toward medical expenses.

Frequently Asked Questions

• Can undocumented renters apply? Yes. Vermont allows ITIN filers and does not share immigration data for enforcement.
• What if the landlord refuses to complete the certificate? File Form RCC with as much documentation as possible and include a statement describing efforts to obtain certification. Vermont may contact the landlord directly.
• How does the credit affect college students? Students who are Vermont residents and pay rent for off-campus housing may qualify if they meet income limits and are not claimed as dependents on another taxpayer’s return.
• Do utilities count? Only if they are mandatory and part of the rent contract, such as heat included in rent. Separate utility payments to third parties do not count.
• Can I split rent with a partner? Yes. If you and a partner share rent but file separate returns, each reports the portion paid. If you file jointly, include total rent and combined income.

Additional Resources

• Vermont Department of Taxes Renter Credit
• Form RCC-146 Landlord Certificate
• myVTax Online Filing Portal
• Champlain Valley Office of Economic Opportunity Tax Assistance
• Vermont Legal Aid Housing Help