Employees who have recently moved, or plan to move to Vermont, may still be eligible for a relocation expense reimbursement grant of up to $7,500 through the state's "ThinkVermont" Worker Relocation Incentive program. The program was funded by a one-time allocation of $3.09 million from the state's legislature and is available to two types of workers — new relocating workers and new remote workers.

The Vermont Agency of Commerce and Community Development (Agency), which administers the program, announced that while it has received applications for more funding than is currently available, the program will remain open and continue to accept applications, although funding is not guaranteed.

As part of the grant application approval process, employers are required confirm the applicant's eligibility.

Eligibility requirements

Eligibility for the relocation grant differs for new relocating workers and new remote workers.

• New relocating worker. A worker that relocates to Vermont to take a job on or after July 1, 2021, and meets the following requirements:
• Becomes a full-time resident
• Becomes a full-time employee for a Vermont employer (at a Vermont location) who attests to the Agency that, after reasonable time and effort, they could not fill the position from Vermont applicants
• Is subject to Vermont income tax
• Earns a wage that is equal or exceeds the Vermont livable wage rate (currently $15.33 per hour)
• Incurs qualified relocation expenses
• New remote worker. A worker that relocates to Vermont to work at a remote job on or after February 1, 2022, and meets the following requirements:
• Becomes a full-time resident
• Is employed full-time for an out-of-state employer and works remotely from a home office or co-working space located in Vermont
• Is subject to Vermont income tax
• Earns a wage that equals or exceeds the Vermont livable wage rate (currently $15.33 per hour)
• Incurs qualified relocation expenses

Ernst & Young LLP insights

Vermont is not the only jurisdiction using incentives to attract remote workers, and in some cases those incentives also apply to employers.

Louisiana. SB 157, enacted in 2021, provides a Louisiana income tax exemption of 50% of gross wages up to $150,000 to qualifying remote workers (referred to as "digital nomads") who establish residency within the state after December 31, 2021. This exemption applies for a period of up two years from 2022 through 2025 and only to those wages earned from remote work. The provision was enacted for purposes of Louisiana economic development. (See Tax Alert 2021-1346.)

West Virginia. "Ascend WestVirgina" offers an incentive of $12,000 and one year of free outdoor recreation to remote workers moving to the state. Additionally, as incentive to employers, tax reforms were made under H.B. 2026 (2021) which, effective January 1, 2022, included an exemption from nonresident income tax for employment within the state of 30 or fewer days in the year. (See Tax Alert 2021-0799.)

Cities. Some cities also offer cash incentives to attract remote workers: Shoals area, Alabama; Topeka, Kansas; and Tulsa, Oklahoma.

———————————————

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor