Key Tax Facts: Vermont
- Top rate of 8.75% on income above $204,000 (single)
- Social Security is partially exempt for lower-income filers
- No deduction for federal income taxes paid
- No local income taxes beyond state and school district rates
Estimate Your 2026 Federal and Vermont State Income Tax
Vermont State Income Tax Overview
Vermont uses a graduated income tax with four brackets ranging from 3.35% to 8.75% for 2024. Single filers reach the top 8.75% rate on income above $213,150. Vermont generally conforms to federal adjusted gross income and provides a standard deduction equal to the federal amount. The state taxes Social Security income but offers an exemption for lower-income residents. Vermont also has a meals and rooms tax and a 6% general sales tax. Vermont offers income-tested property tax adjustments for qualifying homeowners and renters, which can provide meaningful relief for lower- and moderate-income residents.
What Is Different About Vermont's Income Tax
Deductions and exemptions
Vermont's standard deduction is $7,400 for single filers and $14,850 for joint filers for 2025, with a personal exemption of $5,100 per person. Federal itemized deductions are not allowed; Vermont instead offers a charitable contribution credit of 5% of the first $20,000 donated.
Credits worth knowing
The state earned income credit is 38% of the federal credit. Vermont's child tax credit pays $1,000 per child five and under for households with income under $125,000, and there is a child and dependent care credit of 72% of the federal credit, a property tax credit for homeowners under an income limit, and a renter credit.
Retirement, capital gains, and other income
Social Security is exempt for single filers with income under $50,000 and joint filers under $65,000, with a partial exemption above. Vermont also exempts up to $10,000 of military retirement pay, civil service, and certain other retirement income under the same income limits. Vermont excludes 40% of long-term capital gains on assets held three years or more, capped at $350,000, or a flat $5,000 exclusion.
Rules summarized from the Vermont Department of Taxes guidance for tax year 2026. Amounts that index annually are described in general terms; confirm the current figure on the official form instructions.
Vermont Income Tax Brackets (Single Filers, 2026) projected
These are the Vermont state income tax brackets for single filers. Married-filing-jointly brackets use wider income thresholds, carried forward from 2025 pending official 2026 figures. Only the income within each bracket is taxed at that rate -- not your entire income.
| Taxable Income (Single) | Tax Rate |
|---|---|
| $0 - $47,900 | 3.35% |
| $47,900 - $116,000 | 6.6% |
| $116,000 - $242,000 | 7.6% |
| Over $242,000 | 8.75% |
Source: Vermont Department of Taxes. Brackets shown are for single filers; married-filing-jointly thresholds are wider.
What a Vermont Resident Actually Pays: A Worked Example
Your effective tax rate is almost always lower than your top bracket. Here is how the math works for a single filer earning $65,000.
Where Vermont Stands Among the 50 States
Vermont's top rate of 8.75% ranks #8 of the 41 states that tax wages -- among the ten highest in the country. The median top rate across those 41 states is 5.2%, so Vermont is above the middle of the pack. It is one of 27 states with a graduated schedule, using 4 brackets; the top rate starts at $242,000 of taxable income, and the lowest bracket ends at $47,900.
On sales tax the picture is different: Vermont's combined state and average local rate of 6.24% ranks #35 of 50, against a national median of 7.00%.
Vermont State Tax at Five Income Levels (2026, single filer)
| Taxable income | Vermont tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $1,340 | 3.35% | 3.35% |
| $65,000 | $2,733 | 4.21% | 6.6% |
| $100,000 | $5,043 | 5.04% | 6.6% |
| $150,000 | $8,683 | 5.79% | 7.6% |
| $250,000 | $16,375 | 6.55% | 8.75% |
Brackets applied directly to the taxable-income figure shown, before Vermont-specific deductions, exemptions, or credits. Federal tax is separate and comes on top of every row.
Vermont vs. Its Neighbors on $75,000 of Taxable Income
A Vermont resident with $75,000 of taxable income pays about $3,393 in state income tax. Of Vermont's 3 neighboring states, 1 would tax that income less and 2 would tax it more.
| State | Structure | Tax on $75,000 | Top rate | Sales tax |
|---|---|---|---|---|
| Vermont (you) | Graduated | $3,393 | 8.75% | 6.24% |
| New Hampshire | No income tax | $0 | None | 0% |
| Massachusetts | Rate to 9% | $3,750 | 9% | 6.25% |
| New York | Rate to 10.9% | $3,960 | 10.9% | 8.52% |
Frequently Asked Questions -- Vermont Income Tax
Does Vermont have a state income tax?
Yes. Vermont imposes a state income tax with a top marginal rate of 8.75%. This is separate from your federal income tax obligation.
What is the Vermont income tax rate for 2026?
Vermont uses a graduated income tax system with rates from 3.35% to 8.75%. Only the income within each bracket is taxed at that bracket's rate -- not your entire income.
Do I have to file a Vermont state tax return?
Most full-year Vermont residents with income above the state filing threshold must file a state return. Check the Vermont Department of Taxes for current thresholds and requirements.
How accurate is this estimate?
The federal figure uses the official IRS 2026 brackets and standard deduction. The Vermont figure applies the 2026 single-filer rate schedule to the same taxable income; it does not model Vermont-specific deductions, exemptions, credits, or local income taxes, so treat it as a planning number and confirm with the Vermont Department of Taxes or a tax professional before filing.
How does Vermont compare with nearby states?
On $75,000 of taxable income, Vermont collects about $3,393. New Hampshire collects $0, Massachusetts collects $3,750, New York collects $3,960. See the comparison table above.
Where does Vermont rank on state income tax?
Vermont's top rate of 8.75% ranks #8 of the 41 states with an income tax, against a median top rate of 5.2%. Its combined sales tax of 6.24% ranks #35 of 50.
Does this calculator include federal income tax?
Yes. It estimates your 2026 federal income tax using the official IRS 2026 brackets, then applies the Vermont rate schedule to the same taxable income and shows both figures plus the combined total.
Where can I find official Vermont tax forms?
Official forms, instructions, and filing guidance are available at the Vermont Department of Taxes.
What is the sales tax rate in Vermont?
Vermont's combined state and average local sales tax rate is 6.24%. This is separate from income tax and applies to most retail purchases -- use our sales tax calculator to check a specific purchase.
When are Vermont 2026 state taxes due?
2026 taxes are generally filed in 2027. The Vermont filing deadline is April 15, 2027, the same as the federal deadline.
Understanding Your Vermont Tax Estimate
Your results combine two separate bills: federal tax owed to the IRS, and Vermont state tax owed to the Vermont Department of Taxes. The state return is filed separately from your federal Form 1040, with a state filing deadline of April 15. For the mechanics of how bracket math actually works -- why your effective rate is almost always lower than your top bracket -- see our marginal vs. effective tax rate guide.
Lowering Your Vermont Bill
Pre-tax retirement contributions reduce your federal and Vermont taxable income in the same move -- see our 401(k) contribution limits and HSA limits guides for the current caps. Beyond that, Vermont-specific credits and deductions that don't exist at the federal level are listed at the Vermont Department of Taxes -- worth checking, since these are easy to miss if you only look at federal guidance.
Combined Sales + Income Tax Picture
Vermont's combined state-plus-average-local sales tax rate is 6.24%. If you're self-employed, that's an added layer on top of income tax -- our self-employment tax calculator covers the SE-specific piece separately.
Disclaimer: Estimates for educational purposes only. State tax results are approximations based on published bracket data and do not account for all deductions, credits, exemptions, local taxes, or individual situations. Not tax, legal, or financial advice. Consult the Vermont Department of Taxes or a qualified tax professional for guidance specific to your situation.