VT Calculation D VT Income Tax Credits
Line 1 VT Higher Education Investment Plan (VHEIP)

Supporting Document Required:
Statement or certificate from VT Student Assistance Corporation or administrator of the investment plan. 

The tax credit equals 10% of the first $2,500 of contributions per beneficiary made during the tax year for an account established through VT Student Assistance Corporation’s higher education investment plan.  For jointly filed returns, each spouse can contribute to a beneficiary's account and each spouse may claim the credit for his or her contributions. Contributions made by another person not listed as the account owner (except spouses filing jointly) are not eligible for the credit.

1]  Canute and Olga, husband and wife, file a joint income tax return. Canute opens a VHEIP account for Junior, a grandchild, with a $2,500 contribution in 2008. Canute also opens a VHEIP account for Sissy, a grandchild, with a $1,000 contribution in 2008. Olga contributes $1,000 to Junior's account and contributes $3,000 to Sissy's account. Canute's contributions provide a tax credit of $350 (10% of $2,500 + 10% of $1,000).  Olga's tax credit is $350 (10% of $1,000 + 10% of $2,500 max).  The tax credit available to the joint return is $700. The contributions may come from the spouse's joint bank account or their individual accounts.  If Canute and Olga file separately, however, she cannot claim a credit unless she opens separate accounts for the grandchildren and is the named account holder.    

2]  Bridget opens an account for Arkin, her son. She contributes $2,500 to the account in 2008. Uncle Jim also makes a $1,000 contribution to Arkin's account. Bridget's contribution provides a $250 tax credit for her. Since Uncle Jim is not the owner of the account, he cannot claim a credit.