I work in VT and had to work in NH for 3 month remotely (where i am a resident). Do I deduct the amount earned while in NH from box 16, the VT state wages?

[LenaH · Accepted solution]

No, please input your W-2 as shown on the form provided by your employer.

Per the State of Vermont, nonresidents are required to pay Vermont income tax as a nonresident on the income earned in Vermont. The income you earned while working remotely from New Hampshire is not taxable in Vermont. 

The Vermont provides this guidance on the page Working Remotely FAQs :

Q: During “normal” times, I live in (am domiciled in) New Hampshire and drive to Vermont every day for work. Since the beginning of the state of emergency, I am working at my Vermont job remotely from my home in New Hampshire. Do I still need to pay Vermont Income Tax?

A: Prior to the pandemic, you were required to pay Vermont income tax as a nonresident on the income earned in Vermont. Presently, however, given your New Hampshire domicile and your remote worker status, the income you earn while at home is not Vermont income (even though your employer is still located in Vermont) and is not subject to Vermont income tax.

Therefore, rather then adjusting your W-2 to reflect the three months you are not liable for Vermont tax, you have to allocate your income while completing your Vermont return. You would allocate your wages in the nonresident Vermont return on the page titled Wages, Salaries & Tips. I have attached a screenshot below for additional guidance.

Take your Vermont wages and multiply them by 75% (25% of the time you worked in NH). Then, you would enter that number in the box, Vermont Amount.