Vermont has one of the highest income tax rates in New England, with a top rate of 8.75%. However, its relatively generous Social Security exemption provides relief for many retirees, and the lowest bracket of 3.35% is moderate.
Quick answer: Vermont’s four-bracket system runs from 3.35% to 8.75%. Social Security is fully exempt for most residents with AGI under $65,000 (single) / $85,000 (married). The federal standard deduction applies ($16,100 single / $32,200 married for 2026).
Vermont Income Tax Brackets 2026
Bracket thresholds below reflect the last confirmed structure — confirm exact current-year thresholds with the Vermont Department of Taxes, as they are inflation-indexed annually.
Single Filers
| Taxable Income | Rate |
|---|---|
| $0 – $47,150 | 3.35% |
| $47,151 – $113,950 | 6.6% |
| $113,951 – $237,950 | 7.6% |
| Over $237,950 | 8.75% |
Married Filing Jointly
| Taxable Income | Rate |
|---|---|
| $0 – $78,150 | 3.35% |
| $78,151 – $189,200 | 6.6% |
| $189,201 – $237,950 | 7.6% |
| Over $237,950 | 8.75% |
Head of Household
| Taxable Income | Rate |
|---|---|
| $0 – $62,650 | 3.35% |
| $62,651 – $163,350 | 6.6% |
| $163,351 – $237,950 | 7.6% |
| Over $237,950 | 8.75% |
Brackets adjust annually for inflation. Confirm current-year figures at tax.vermont.gov.
Vermont Standard Deduction and Exemptions
Vermont conforms to the federal standard deduction:
| Filing Status | Standard Deduction (2026) |
|---|---|
| Single | $16,100 |
| Married Filing Jointly | $32,200 |
| Head of Household | $24,150 |
Personal exemption credit: Vermont allows a credit per taxpayer (not a deduction — subtracted directly from your Vermont tax owed). Confirm the current-year amount with the Vermont Department of Taxes, as this figure is periodically adjusted (last known at $4,500). This credit is phased out at higher income levels.
Worked Example — Vermont Tax on $75,000 Income (Single)
| Item | Amount |
|---|---|
| Gross income | $75,000 |
| Standard deduction (2026) | −$16,100 |
| Vermont taxable income | $58,900 |
| Tax on first $47,150 (3.35%) | $1,580 |
| Tax on $47,150–$58,900 (6.6%) | $776 |
| Subtotal before credit | $2,356 |
| Personal exemption credit (confirm current amount) | ~−$4,500 |
| Vermont income tax owed | ~$0 (credit likely exceeds tax at this income level) |
Because the personal exemption credit likely exceeds the calculated tax at this income level, this taxpayer would owe close to $0 in Vermont income tax. The credit is not refundable, however, so any excess above the tax owed is not returned. Confirm the exact current credit amount before relying on this calculation.
Note: At higher income levels, the exemption credit phases out, and the full calculated tax is owed.
How Vermont Taxes Retirement Income
| Income Type | Vermont Treatment |
|---|---|
| Social Security | Exempt if federal AGI ≤ $65,000 (single) / $85,000 (married) |
| 401(k) / IRA withdrawals | Taxed at regular VT rates (3.35–8.75%) |
| Pension income | Taxed (no special exemption) |
| Military retirement | No general exemption |
| Roth IRA qualified distributions | Exempt (follows federal) |
Social Security phase-out: For AGI between $65,000 and $75,000 (single), Vermont phases out the Social Security exemption. Above $75,000, Social Security is fully included in Vermont income.
Vermont Tax Credits
Confirm current amounts and percentages with the Vermont Department of Taxes, as these figures are periodically adjusted:
Earned Income Tax Credit — Vermont offers a state EITC as a percentage of the federal EITC — one of the more generous state matches in the country.
Child and Dependent Care Credit — a percentage of the federal credit.
Renter Credit — Vermont renters who paid more than a set percentage of their income in rent may claim a credit — confirm the current threshold and maximum amount.
Charitable Contributions Credit — Vermont allows a credit for charitable contributions, claimed directly against Vermont tax owed — confirm the current percentage.
Who Must File a Vermont Return
Vermont requires a return from:
- Full-year residents with Vermont gross income above the filing threshold
- Part-year residents with Vermont-source income during the year
- Nonresidents who earned wages, business income, or rental income in Vermont
Filing Details
- Form: IN-111 (residents); IN-111 with Vermont Schedule IN-112 (part-year/nonresident)
- Deadline: April 15, 2026
- Extension: October 15, 2026 (automatic with federal extension)
- Estimated payments: Form IN-114 quarterly — confirm current threshold requiring payments
- E-file: Available through Vermont’s myVTax portal and major tax software
Vermont vs. Neighboring States
| State | Top Income Tax Rate |
|---|---|
| Vermont | 8.75% |
| Maine | 7.15% (10.15% with surcharge) |
| New Hampshire | 0% (no income tax of any kind since 2025) |
| Massachusetts | 5% flat (9% on income above $1,107,750 for 2026) |
| New York | 4%–10.9% |
Vermont’s top rate of 8.75% is among the highest in New England excluding the Massachusetts surtax and Maine’s high-income surcharge.
Related Guides
- 9 States With No Income Tax 2026
- Federal Income Tax Brackets 2026
- State Income Tax Rates 2026 — All 50 States
- Maine Income Tax Guide 2026
- New Hampshire — No State Income Tax
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