What are Vermont's income tax rates for 2026?

Vermont has four income tax brackets: 3.35% on income up to $47,150 (single), 6.6% from $47,150 to $113,950, 7.6% from $113,950 to $237,950, and 8.75% on all income above $237,950. Vermont consistently has one of the highest top rates in the Northeast.

Does Vermont tax Social Security benefits?

Vermont provides a Social Security exemption for lower-income residents. If your federal adjusted gross income is $65,000 or less (single) or $85,000 or less (married), your Social Security benefits are fully exempt from Vermont income tax. Above those thresholds, Social Security is gradually taxed.

What is the Vermont standard deduction for 2026?

Vermont conforms to the federal standard deduction: $15,000 for single filers and $30,000 for married couples filing jointly in 2026. Vermont also allows a personal exemption credit of $4,500 per taxpayer.

Is Vermont a good state for retirees?

Vermont is generally not considered tax-friendly for high-income retirees due to its top rate of 8.75%. However, the Social Security exemption for AGI under $65,000 (single) is meaningful. Retirees living on Social Security plus modest IRA withdrawals often fall below that threshold.

When is the Vermont state tax filing deadline?

Vermont's income tax filing deadline is April 15, 2026. Vermont grants an automatic extension to file until October 15 if you have a federal extension. Any tax owed must be paid by April 15 to avoid interest charges. Vermont Form IN-111 is the resident income tax return.

Vermont Income Tax Guide 2026: Rates Up to 8.75% — Brackets, Deductions & Filing

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.

Vermont Income Tax Brackets 2026

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 2026 figures at tax.vermont.gov.

Vermont Standard Deduction and Exemptions

Vermont conforms to the federal standard deduction:

Filing Status	Standard Deduction
Single	$15,000
Married Filing Jointly	$30,000
Head of Household	$22,500

Personal exemption credit: Vermont allows a credit of $4,500 per taxpayer (not a deduction — this amount is subtracted directly from your Vermont tax owed). 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	−$15,000
Vermont taxable income	$60,000
Tax on first $47,150 (3.35%)	$1,580
Tax on $47,150–$60,000 (6.6%)	$848
Subtotal before credit	$2,428
Personal exemption credit	−$4,500
Vermont income tax owed	$0 (credit exceeds tax)

Wait — because the personal exemption credit ($4,500) exceeds the calculated tax ($2,428), this taxpayer owes $0 in Vermont income tax. The credit is not refundable, however, so the excess is not returned.

Note: At higher income levels, the exemption credit phases out. For a single filer earning $150,000, the credit phases out completely and the full 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

Earned Income Tax Credit — Vermont offers a state EITC equal to 36% of the federal EITC (one of the most generous in the country).

Child and Dependent Care Credit — 24% of the federal credit.

Renter Credit — Vermont renters who paid more than 5% of their income in rent may claim a credit up to $2,000 on their Vermont return.

Charitable Contributions Credit — Vermont allows a 5% credit for charitable contributions, claimed directly against Vermont tax owed.

Who Must File a Vermont Return

Vermont requires a return from:

Full-year residents with Vermont gross income above the filing threshold (~$15,000 for single filers)
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 if you’ll owe more than $500
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% on wages
Massachusetts	5% (9% on income over $1M)
New York	6.85%–10.9%

Vermont’s top rate of 8.75% is the highest in New England excluding the Maine high-income surcharge.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy