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Line h Child support and cash gifts List all child support payments received in the calendar year as well as all cash gifts.
Cash gifts include any and all cash received by you or other household members, as well as cash equivalents. Cash
equivalents include gifted stocks, bonds, treasury obligations, certificates of deposit or other household instruments
convertible to cash.
Specify the type of income you are reporting on the indicated line.
Line i Business income Enter income attributable to a business. If there is a business loss, leave blank. For taxpayers Page 6
filing Married Filing Jointly, where both spouses have business income or loss from sole proprietorships, enter the
amount from federal Form 1040 or leave blank if a negative, in the Claimant column.
Line j Capital gains Report nontaxable gains from the sale of your home and gains from federal Schedule D, Capital
Gains and Losses: A capital loss carryforward cannot be used to offset a current year capital gain. Add back federal
Schedule D, Lines 6 and 14 to Line 16. This cannot be less than zero (0).
Exception: A business loss may offset a capital gain on the sale of the business’s property provided all three of the
following are true for the business: (1) the loss and capital gain are for the same business; (2) the IRS requires the
capital gain to be reported; and (3) the business loss and capital gain from the sale of the business’s property both
occurred in the 2023 tax year. If the offset of the capital gain by the loss creates a negative amount, leave blank.
A capital loss cannot offset business income.
Line k Taxable pensions, annuities, IRAs, and retirement fund distributions Enter the income from retirement, deferred
compensation plans, and annuities as reported on federal Form 1040. Household income includes non-qualified
distributions from retirement and deferred compensation plans and both taxable and nontaxable federal pension and
annuity benefits.
Line l Rental and Royalty income Enter the income from each rental property you own as reported on federal
Schedule E, Supplemental Income and Loss, Part I. Each rental property stands on its own. A loss generated by
one property may not be used to reduce income from a different property. Room and board payments received
as difficulty of care payments for a member of your household are rental income and must be reported on this line.
Report royalty income from federal Form 1099-MISC, Miscellaneous Income, 1099-S, Proceeds from Real Estate
Transactions; Schedule K-1, Share of Income Deductions, Credits, etc.; or federal Schedule E, Supplemental Income
and Loss, Part I.
Line m Income from Partnerships, S Corporations, LLCs, Farms, Trusts and Estates Federal Schedule K-1 pass-
through income as required to be reported on federal Schedules E and/or F, Profit or Loss from Farming. Report
ordinary business income, rental income and guaranteed payments from K-1 on this line. The loss from one K-1
cannot offset income from another K-1. A loss is reported as -0-. See Line j instructions for the only provision
allowing netting of a business loss.
Line n Other income Sources of other income include, but are not limited to, prizes and awards, gambling or lottery
winnings, director’s fees, employer allowances, taxable refunds from federal Form 1040, allowances received by
dependents of armed service personnel and military subsistence payments (Basic Allowance for Housing, flexible
spending arrangement or account), loss of time insurance, cost of living adjustment paid to federal employees, and
other gains from federal Form 1040. Report on this line income reported to you on federal Form 1099-MISC or
W-2G, Certain Gambling Winnings. For more information on military income, see the “Vermont Tax Guide for
Military and National Services” available on the Department’s website.
Line o Add items a through n by column. Carry those amounts over to the top of the next page.
Adjustments to Income:
The following adjustments to household income may be made for each member of the household.
Line p Social Security and Medicare Tax Withheld and Railroad Retirement Tier 1 and Self-Employment Tax
on Income Reported Social Security and Medicare, or equivalent tier 1 payroll tax payments are deducted from
household income, but only to the extent that the salary and wages are included in household income. Please see the
examples that follow:
1. Deferred compensation – If you made a deferred compensation contribution for the tax year, the amount of
the contribution is not included in the federal Adjusted Gross Income as stated on Form W-2, Box 1, Wage
and Tax Statement. The Social Security and Medicare taxes on Form W-2 must be reduced for the purposes
of reporting household income on Schedule HI-144. Generally, this amount is 7.65% of the amount stated
on Form W-2, Box 1.
2. Military pay – Multiplying the amount stated on Form W-2, Box 1, by 7.65% provides the correct value for
this deduction.
3. Allocated tips – In addition to the figures included on Form W-2, add the Social Security and Medicare
payments you made as the result of completing federal Form 4137, Social Security and Medicare Tax On
Unreported Tip Income.
Self-Employed Social Security and Medicare Taxes Paid Self-employed claimants may subtract from household
income the amount from federal Schedule SE, Self-Employment Tax, Part I, Line 12, that represents the Social
2024 Form HS-122 Instructions
tax.vermont.gov Page 6 of 10
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