Vermont Mileage and Vehicle Tax Records (2026): Federal AGI, No Bonus Depreciation, TNC Rules and AV Testing Permits
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Vermont starts Form IN-111 from federal adjusted gross income, so a self-employed driver's federal mileage deduction carries over, and 2025 rates run from 3.35% to 8.75%. Vermont doesn't recognize federal bonus depreciation, so you add it back on Schedule IN-112. State law sets TNC insurance and records rules, and driverless testing needs a permit.
Vermont follows your federal adjusted gross income but keeps its own depreciation rules for bonus depreciation. This guide covers what the Vermont Department of Taxes, the Vermont Statutes and VTrans say as of October 16, 2026.
The federal baseline every Vermont driver starts from
Most vehicle deductions begin on your federal return. If you're self-employed, you can generally use the standard mileage rate or actual expenses for the business share of your car (IRS Topic 510). For 2026 the business rate is 72.5¢ per mile for January 1 to June 30 (IR-2025-128 / Notice 2026-10) and 76¢ per mile for July 1 to December 31 (IR-2026-29 / Announcement 2026-11) (IRS standard mileage rates). EVs use the same rates; see the 2026 EV mileage rate guide. Most employees can't deduct unreimbursed car expenses federally (Topic 510). IRS Publication 463 asks for each business trip's miles, date, destination and purpose, plus total miles. Commuting stays personal (commuting vs business miles).
How Vermont treats vehicle deductions
The 2025 Form IN-111 instructions make federal adjusted gross income a required entry on line 1, so a Schedule C vehicle deduction, figured with the standard mileage rate or actual costs, is already reflected. Line 2 brings in net modifications from Schedule IN-112. The 2025 rate schedules run from 3.35% to 8.75%.
Depreciation: no bonus
The 2025 Schedule IN-112 instructions say Vermont doesn't recognize bonus depreciation allowed under federal law. On line 4 you add back the federal bonus depreciation for assets placed in service in 2025. On line 9 you adjust for prior-year property, entering the difference between the federal and Vermont depreciation. Keep a Vermont depreciation schedule beside your federal one for any vehicle with bonus depreciation. See robotaxi fleet depreciation and Section 179.
Rideshare (TNC) rules in Vermont
Vermont's TNC law is 23 V.S.A. chapter 10, added in 2018. Section 750 sets the insurance a driver, or the company for the driver, must carry while logged on and during rides. Section 751 sets driver application and annual background check rules. Under section 752, the Commissioner of Motor Vehicles may inspect a random sample of up to 25 drivers' records per company each year. Whatever the company keeps, download your own receipts and annual summaries. See which rideshare miles count. If you also drive in a neighboring state, see the New York and Massachusetts guides.
Robotaxis and automated vehicles in Vermont
Vermont's Automated Vehicle Testing Act (23 V.S.A. chapter 41, added in 2019) says an automated vehicle can't be tested on public highways until the Traffic Committee approves a permit that defines the test's scope and operational design domain, after a public hearing. The act defines an operator as a trained employee or contractor who can take immediate manual or remote control of the vehicle. VTrans's testing page explains the permit process. The act is written for testing, so check with VTrans or an attorney about any other operations. For fleet records, see robotaxi fleet tax basics.
What to keep in your Vermont records
- Each business trip's date, start, destination, purpose and miles, plus total miles for the year (Pub 463); a weekly log counts as timely kept.
- Separate Business, Commute and Personal totals for Form 4562 Part V.
- Keep records until the period of limitations runs out, generally 3 years federally (IRS); ask your preparer about the state period.
- Keep a Vermont depreciation schedule for any vehicle with federal bonus depreciation, for the IN-112 adjustments.
- For rideshare: download trip receipts and annual summaries for your federal Schedule C.
For the full list of log fields, see what the IRS asks you to record.
Example: 1,000 hypothetical business miles driven in September 2026 × 76¢ (IR-2026-29) = $760 at the federal standard rate. Miles driven in March 2026 would use 72.5¢ (IR-2025-128) instead, so keep each trip's date. Estimates, not tax advice.
One log for both returns
A Vermont return doesn't call for a second mileage log; your preparer works from the same business, commuting and personal miles. CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). You connect your Tesla account once through Tesla's standard account sign-in (OAuth); CyberDeduct never sees or stores your password. Home/work rules and route templates label most trips Business, Commute or Personal; you tap to change any label and confirm the purpose. The dashboard shows your business-use percentage and warns you on the 28th if you're under 50%. You export a PDF or CSV log plus a Form 4562 Part V worksheet for your preparer. See how the log is built or see plans.
Sources (checked October 16, 2026)
- Vermont Department of Taxes, 2025 IN-111 instructions
- Vermont Department of Taxes, 2025 IN-112 instructions
- 23 V.S.A. chapter 10 (TNCs)
- 23 V.S.A. chapter 41 (Automated Vehicle Testing)
- VTrans, Automated Vehicle Testing in Vermont
- IRS, Standard mileage rates; IRS Publication 463; IRS Topic 510
Frequently asked questions
Does Vermont use my federal mileage deduction?
Generally yes for the self-employed. Form IN-111 starts from federal adjusted gross income on line 1, which already reflects Schedule C vehicle expenses.
Does Vermont allow bonus depreciation?
No. You add back federal bonus depreciation for 2025 assets on Schedule IN-112, line 4, and adjust for prior-year property on line 9.
What are Vermont's 2025 income tax rates?
The 2025 rate schedules run from 3.35% to 8.75%.
What does Vermont's TNC law cover?
Insurance, driver checks and a Department of Motor Vehicles inspection of a sample of driver records (23 V.S.A. §§ 750 to 752).
Can robotaxis operate in Vermont?
Testing needs a Traffic Committee permit under the Automated Vehicle Testing Act. Check with VTrans about other operations.
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation. State laws and bill status change; check the linked sources for the current text.
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