Vermont Tax Calculator 2025
Calculate your Vermont state income tax with our comprehensive 2025 calculator featuring the Green Mountain State's progressive tax rates from 3.35% to 8.75%, standard deductions, and advanced tax planning tools.
Calculate Your Vermont Tax
Enter your income information to calculate Vermont's progressive state income tax with rates ranging from 3.35% to 8.75% plus applicable deductions and exemptions.
Vermont Tax Structure 2025
Vermont operates a progressive income tax system with rates ranging from 3.35% to 8.75%, making it one of the higher-tax states in New England. The Green Mountain State also provides various deductions and credits for property taxes and retirement income.
VT Progressive Tax Brackets (2025)
- 3.35% on income up to $42,050 (single)
- 6.60% on income $42,051 - $101,850
- 7.60% on income $101,851 - $208,850
- 8.75% on income over $208,850
Standard Deductions (2025)
- Single: $13,850
- Married Filing Jointly: $27,700
- Married Filing Separately: $13,850
- Head of Household: $20,800
Vermont Tax Benefits and Credits
Vermont provides several tax benefits and credits, particularly for property taxes, working families, and retirement income. The state's tax system aims to support Vermont residents through various financial incentives.
- Personal Exemption: $4,800 per taxpayer and qualifying dependent
- Earned Income Credit: Vermont version of federal EIC for qualifying families
- Property Tax Credit: Credit for rent paid or property taxes on homestead
- Child and Dependent Care Credit: Credit for childcare expenses
- Education Tax Credit: Credits for qualifying educational expenses
- Retirement Income Exemption: Partial exemption for certain retirement income
- Military Pay Benefits: Exemption for certain military pay and benefits
Vermont Residency and Tax Planning
Understanding Vermont residency requirements and tax planning strategies is important given the state's progressive tax structure and property tax considerations for comprehensive tax optimization.
Establishing VT Residency
Vermont considers you a resident if your domicile is in Vermont or you maintain a permanent place of abode in Vermont and spend more than 183 days in the state during the tax year.
Part-Year Residents
Part-year residents pay Vermont tax only on income earned while a Vermont resident, with specific allocation rules for business and investment income sources.
Non-Resident Taxation
Non-residents pay Vermont tax only on income sourced to Vermont, including wages earned in the state, Vermont rental income, and business income from Vermont operations.
Property Tax Considerations
Vermont's property tax system and available credits can significantly impact overall tax burden. Consider homestead exemptions and property tax deductions when planning.
Frequently Asked Questions
What are Vermont's income tax rates for 2025?
Vermont has progressive income tax rates ranging from 3.35% to 8.75% for 2025. The rates increase across four brackets, with the top rate of 8.75% applying to income over $208,850 for single filers.
Does Vermont tax retirement income?
Vermont partially taxes retirement income. Social Security benefits are not taxed, but other retirement income including pensions and 401(k) distributions may be subject to Vermont tax, with some exemptions available for qualifying retirement income.
How does Vermont's property tax system work?
Vermont has one of the highest property tax rates in the nation, but offers homestead exemptions and property tax credits to help reduce the burden on residents. The property tax credit is available for rent paid or property taxes.
Is Vermont tax-friendly compared to neighboring states?
Vermont has higher income tax rates compared to neighboring New Hampshire (no income tax) but may be competitive with Massachusetts and New York when considering overall tax burden including property taxes and available credits.
How are remote workers taxed in Vermont?
Vermont residents working remotely pay Vermont tax on all income regardless of where they work. Non-residents working remotely for Vermont companies generally don't owe Vermont tax unless they work physically in the state.
What deductions are available for Vermont taxpayers?
Vermont offers standard deductions, personal exemptions, property tax credits, retirement income exemptions, and various other deductions including education credits and child care expenses.