2023 Schedule IN-112 Instructions tax.vermont.gov Page 1 of 4 SCHEDULE IN-112 Vermont Tax Adjustments and Credits Print your name and Social Security Number on this schedule. Please use blue or black ink to make all entries. Who Must File Schedule IN-112

You must file Schedule IN-112 for: • Additions and Subtractions to Federal Adjusted Gross Income (Part I) - Interest Income from State and Local Taxes Exempt from Federal Tax - Interest and Dividend Income - Federal Bonus Depreciation - Taxable Refunds of State and Local Taxes - Medical Expense Deduction - Retirement Benefits Exempt from Taxation - Railroad Retirement Income - Bond/Note Interest Income • Vermont Refundable Credits (Part II) - Child and Dependent Care Credit - Vermont Child Tax Credit - Vermont Earned Income Tax Credit Part I Additions to and Subtractions from Federal Adjusted Gross Income Additions to Federal Adjusted Gross Income Lines 1 through 3, General Information

Interest and dividend income from non-Vermont state and local obligations which are exempted from federal taxable income are taxable in Vermont. A Vermont obligation is one from the state of Vermont or a Vermont municipality. Line 1 Enter the total interest and dividend income received from all state and local obligations exempted from federal tax as reported on federal Form 1040, U.S. Individual Income Tax Return. Line 2 Enter the interest and dividend income from Vermont obligations. This may have been paid directly to you or through a mutual fund or other legal entity that invests in Vermont state and local obligations. If you receive this income from a mutual fund that has only a portion of its assets invested in Vermont state and local obligations, enter only the amount for the Vermont obligation(s). Line 3 Subtract Line 2 from Line 1. This is the amount of interest and dividend income from non-Vermont state and local obligations that must be included in Vermont Taxable Income. Line 4 Federal Bonus Depreciation. Vermont does not recognize the bonus depreciation allowed under federal law. Enter the difference between the depreciation calculated by standard MACRS methods and the depreciation calculated using the federal bonus depreciation for assets placed in service in 2023. Read Technical Bulletin TB-44, Disallowance of Bonus Depreciation Provisions of Federal Economic Stimulus Act of 2008, on our website for information on calculating the amount to add back to taxable income. Line 5 Reserved Line 6 Total Federal Adjusted Gross Income Additions. Add Lines 3 and 4. Subtractions From Federal Adjusted Gross Income Line 7 Interest Income from U.S. Obligations. Interest income from U.S. government obligations (such as U.S. Treasury bonds, bills, and notes) is exempt from Vermont tax under the laws of the United States. Enter the amount of interest income from U.S. Obligations on this line. Read Technical Bulletin TB-24, Exemption of Income of U.S. Government Obligations, on our website. Line 8 Capital Gains Exclusion. See Schedule IN-153, Capital Gains Exclusion Calculation, and instructions to calculate the capital gains exclusion for 2023. Read Department regulation § 1.5811(21)(B)(ii) and Technical Bulletin TB-60, Taxation of Gain on the Sale of Capital Assets, on our website to help determine your capital gain exclusion. Complete and submit Schedule IN-153. Line 9 Adjustment for Bonus Depreciation on Prior Year Property. Enter the difference between the depreciation calculated by standard MACRS methods and the depreciation calculated at the federal level. For information on calculating the amount that can be subtracted from taxable income, read Technical Bulletin TB-44 on our website. Line 10 Taxable Refunds of State and Local Income Taxes. Enter the amount reported on your federal Form 1040, Schedule 1.

2023 Schedule IN-112 Instructions tax.vermont.gov Page 2 of 4 RETIREMENT INCOME EXEMPTION WORKSHEET PLEASE READ ALL INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS WORKSHEET. Instructions: It is important that you answer the questions in Section I to determine if you qualify for a full or partial exemption. If you qualify for a partial exemption, you may move on to Section II to calculate the amount of the exemption. SECTION I: Do you qualify for the Vermont Retirement Income full or partial exemption? 1. Did you report an amount on federal Form 1040, U.S. Individual Income Tax Return, Line 6b, for Social Security benefits that were taxable in the current tax year or did you receive retirement income from another eligible retirement system? Income received from a contributory annuity, pension, endowment, or retirement system of the U.S. government or a state government, including military retirement and the Civil Service Retirement System, is eligible for a reduction in tax. The exemption only applies to benefits that are based on earnings not covered by the Social Security Act (i.e., earnings that were not subject to Social Security tax withholding). c No, STOP. You do not qualify for this exemption. c Yes. Proceed to question 2. 2. If you are: • Married filing jointly, is your Adjusted Gross Income (AGI) on Form IN-111, Vermont Income Tax Return, Line 1, less than $75,000? • Single, head of household, surviving spouse, or married filing separately, is your AGI on Form IN-111, Line 1, less than $60,000? c No, STOP. You do not qualify for this exemption. c Yes. You qualify for Vermont’s Retirement Income exemption. Proceed to question 3. 3. If you are: • Married filing jointly, is your AGI less than $65,000? • Single, head of household, surviving spouse, or married filing separately, is your AGI less than $50,000? c No. Please proceed to Section II of this worksheet. c Yes. You qualify for a full exemption. If you elected the exemption for social security, please enter the full amount from federal Form 1040, Line 6b, on Schedule IN-112, Part I, Line 12. If you elected one of the other retirement exemptions, enter your eligible retirement system income or $10,000, whichever is less. SECTION II: Calculating your Partial Retirement Income Exemption This section is for married joint filers with an Adjusted Gross Income (AGI) between $65,000-$75,000 and for single, head of household, surviving spouse, or married separate filers with an AGI between $50,000-$60,000. 4. If you are:

• Married filing jointly, enter $75,000.

• All other filing statuses, enter $60,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4. ________________ 5. Enter your AGI from Form IN-111, Line 1.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. ________________ 6. Subtract Line 5 from Line 4. If Line 5 is greater than Line 4, enter -0-.. . . . . . . . . . . . . . . . . . 6. ________________ 7. Divide Line 6 by $10,000. This value will be a decimal. Please round to the second decimal place (Example: .481 would round to .48).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. ________________ 8. Enter the lesser of Line 7 or the value 1 (This line should not be greater than 1).. . . . . . . . . . . 8. ________________

Please complete Lines 9 & 10 OR 11 & 12. You may only elect one exclusion per taxable year. If you elected to exempt your social security income: 9. Enter the amount from federal Form 1040, Line 6b.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. ________________ 10. Amount of partial exemption. Multiply Line 9 by Line 8. Enter this amount on Schedule IN-112, Part I, Line 12.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. ________________ If you elected one of the other allowable retirement income exemptions: 11. Enter the lesser of the retirement income you earned from that source or 10,000.. . . . . . . . . . 11. ________________ 12. Amount of partial exemption. Multiply Line 11 by Line 8. Enter this amount on Schedule IN-112, Part I, Line 12.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. ________________ Note about civil unions: If you are in a civil union and filing jointly, you should file for this exemption as married filing jointly. If you are a civil union and filing separately, you should file as married filing separately.

2023 Schedule IN-112 Instructions tax.vermont.gov Page 3 of 4 Line 11 Medical Expenses Deduction. Complete the worksheet located in the instructions. MEDICAL DEDUCTION WORKSHEET 1a. Medical and Dental Expense from federal Form 1040, Schedule A, Line 4. . . . . . . . . . . . . . . 1a. ________________ 1b. Non-allowable expenses included in Line 1a (See instructions below*) . . . . . . . . . . . . . . . . . 1b. ________________ 1c. Total. Line 1a minus Line 1b. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1c. ________________ 2. Amount from Vermont Form IN-111, Line 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. ________________ 3. Subtract Line 2 from Line 1c. Enter here and on Schedule IN-112, Part I, Line 11. . . . . . . . . 3. ________________ If amount on Line 3 is negative, STOP. You do not qualify for this deduction. *If you pay recurring monthly payments or entrance fees to a retirement community, these amounts are not deductible. Please enter the fees on Line 1b. Please see our website at tax.vermont.gov for more information. Line 12 Retirement Benefits Exempt from Vermont Taxation. Complete the Retirement Income Exemption Worksheet located in the instructions. Line 13 Railroad Retirement. Enter the amount you received in 2023 for Regular Railroad Retirement Benefits (Tier 1) and Supplemental Railroad Annuity Payments (Tier 2). This income is taxable at the federal level, but exempt from Vermont income tax. If you receive Social Security that includes Tier 1 or Tier 2 benefits, enter only the portion included in your federal Adjusted Gross Income. You may be asked to provide the Required Supporting Documents: Copies of 1099, 1099RB, WP-4, or any other document you received showing payment of these benefits. Line 14 Bond/Note Interest Income. The interest or income from a bond or note of: 1) Vermont Student Assistance Corporation, 2) Build America, 3) Vermont Telecommunications Authority, or 4) Vermont Public Power Supply Authority is exempt from Vermont income tax to the extent the interest or income is included in federal Adjusted Gross Income. Enter the amount of interest or income from these sources that is also included in your federal Adjusted Gross Income. Line 15a Student Loan Interest. Total student loan interest you paid in 2023 on qualified student loans. Line 15b Student loan interest already deducted on federal Form 1040, Schedule 1, Line 21. Line 15c Subtract Line 15b from Line 15a. If filing jointly and AGI is greater than $200,000, enter -0- . All other filers, if AGI is greater than $120,000, enter -0-. Line 16 Reserved Line 17 Total Federal Adjusted Gross Income Subtractions. Add Lines 7 through 14 and Line 15c. Line 18 Net Modifications to Federal Adjusted Gross Income. Subtract Line 17 from Line 6. If Line 6 is less than Line 17, use a hyphen “-” to indicate a negative. Enter on Form IN-111, Vermont Income Tax Return, Line 2. Part II Vermont Refundable Credits

Child Tax Credits and Earned Income Tax Credits are available to all qualifying Vermont residents regardless of whether they, their spouse, or their qualified dependent have a Social Security Number or valid ITIN. Returns filed for individuals with no SSN or ITIN will need to be paper filed and the federal Form 1040 must be filed following all IRS rules reporting all income sources as required by the Federal Government to determine your eligibility. The recomputed box needs to be marked on Vermont Form IN-111. Child and Dependent Care Credit - Residents and Part-Year Residents Line 1 Child and Dependent Care Credit (Vermont Residents and Part-Year Residents only)

Enter the amount of your federal Child and Dependent Care Credit from federal Form 2441, Line 11 for care provided. Line 2 Vermont Child and Dependent Care Credit. Multiply Line 1 by 72% (0.72). Child Tax Credit - Residents and Part-Year Residents Line 3 Enter the number of qualifying children and provide their names and social security numbers in the space below. Qualifying children are those born between 2018 and 2023. Line 4 Child Tax Credit. Multiply Line 3 by $1,000 or if your AGI is greater than $125,000, use the table to find the credit amount per qualifying child to use on Line 4.

2023 Schedule IN-112 Instructions tax.vermont.gov Page 4 of 4 CHILD TAX CREDIT TABLE

If your adjusted gross income from Form IN-111, Line 1, is greater than $125,000, use this table to find the child tax credit amount to enter on Line 4.

0 125,000 1,000 125,001 126,000 980 126,001 127,000 960 127,001 128,000 940 128,001 129,000 920 129,001 130,000 900 130,001 131,000 880 131,001 132,000 860 132,001 133,000 840 133,001 134,000 820 134,001 135,000 800 135,001 136,000 780 136,001 137,000 760 137,001 138,000 740 138,001 139,000 720 139,001 140,000 700 140,001 141,000 680 141,001 142,000 660 142,001 143,000 640 143,001 144,000 620 144,001 145,000 600 145,001 146,000 580 146,001 147,000 560 147,001 148,000 540 148,001 149,000 520 149,001 150,000 500 150,001 151,000 480 151,001 152,000 460 152,001 153,000 440 153,001 154,000 420 154,001 155,000 400 155,001 156,000 380 156,001 157,000 360 157,001 158,000 340 158,001 159,000 320 159,001 160,000 300 160,001 161,000 280 161,001 162,000 260 162,001 163,000 240 163,001 164,000 220 164,001 165,000 200 165,001 166,000 180 166,001 167,000 160 167,001 168,000 140 168,001 169,000 120 169,001 170,000 100 170,001 171,000 80 171,001 172,000 60 172,001 173,000 40 173,001 174,000 20 174,001 - 0 If Adjusted Gross Enter on

Income is... Line 4 At Least But Not Child Tax

More Than Credit Is... If Adjusted Gross Enter on

Income is... Line 4 At Least But Not Child Tax

More Than Credit Is... If Adjusted Gross Enter on

Income is... Line 4 At Least But Not Child Tax

More Than Credit Is... If Adjusted Gross Enter on

Income is... Line 4 At Least But Not Child Tax

More Than Credit Is... Line 5 Enter number of qualifying children from federal Schedule EIC. Line 6 Federal Earned Income Tax Credit. Enter the amount from federal Form 1040. Line 7 Vermont Earned Income Tax Credit. Multiply Line 6 by 38% (0.38). Refundable Tax Credit - Residents and Part-Year Residents Line 8 Total Vermont Refundable Tax Credit. Add Lines 2, 4, and 7.

Full-Year Residents: Enter this amount on Form IN-111, Line 25c.

Part-Year Residents: Complete Lines 9 through 12. Line 9 Part-year residents only: Enter the amount from Schedule IN-113, Line 14B, Vermont Portion of Total Income. Line 10 Part-year residents only: Enter amount from Schedule IN-113, Line 14a, Total Income. Line 11 Part-year residents only: Refundable Tax Credit Adjustment Percentage. Divide Line 9 by Line 10, then multiply the result by 100. Line 12 Part-year residents only: Total Vermont Refundable Credit Adjusted for Part-Year Residents. Multiply Line 8 by Line 11. Enter this amount on Form IN-111, Line 25c.