Vermont State Income Tax in 2025: A Guide

Vermont’s state income tax uses a progressive structure with four tax brackets, ranging from 3.35% to 8.75% for the 2024 tax year (the taxes due in 2025).  

The amount you owe depends on your taxable income, which is calculated by applying deductions and exemptions to your federal adjusted gross income (AGI). Factors like filing status, total earnings, and specific Vermont credits and deductions can change the amount of taxes you owe.  

Whether you’re a full-time resident, part-time resident, or nonresident with Vermont income, understanding how these elements come together will help you confidently navigate your tax responsibilities.

*Note that you are still responsible for federal taxes if you meet the IRS income filing threshold. This article addresses state-specific taxes only. 

Vermont state income tax rates

Vermont’s state income tax system includes four tax brackets: 

• 3.35% 
• 6.6% 
• 7.6% 
• 8.75% 

The rate you pay is based on your taxable income and filing status, such as single, married filing jointly, or head of household.  

Vermont state taxes are due by April 15, 2025—the same as the federal tax deadline. Filing your taxes on time helps you avoid penalties and interest on any unpaid taxes. 

The following sections include easy-to-read charts that break down Vermont’s tax brackets and rates by filing status, helping you understand where your income fits and what you may owe.

Single

Taxable income	Tax rate
$0 to $47,900	$0 + 3.35% of the amount over $0
$47,901 to $75,000	$1,605 + 6.6% of the amount over $47,900
$75,001 to $116,000	$3,393 + 6.6% of the amount over $75,000
$116,001 to $242,000	$6,099 + 7.6% of the amount over $116,000
Over $242,000	$15,675 + 8.75% of the amount over $242,000

Married/civil union filing separately

Taxable income	Tax rate
$0 to $39,975	$0 + 3.35% of the amount over $0
$39,976 to $75,000	$1,339 + 6.6% of the amount over $39,975
$75,001 to $96,650	$3,651 + 6.6% of the amount over $75,000
$96,651 to $147,300	$5,080 + 7.6% of the amount over $96,650
Over $147,300	$8,929 + 8.75% of the amount over $147,300

Married/civil union filing jointly

Taxable income	Tax rate
$0 to $75,000	$0 + 3.35% of the amount over $0
$75,001 to $79,950	$2,513 + 3.35% of the amount over $75,000
$79,951 to $193,300	$2,678 + 6.6% of the amount over $79,950
$193,301 to $294,600	$10,159 + 7.6% of the amount over $193,300
Over $294,600	$17,858 + 8.75% of the amount over $294,600

Head of household

Taxable income	Tax rate
$0 to $64,200	$0 + 3.35% of the amount over $0
$64,201 to $75,000	$2,151 + 6.6% of the amount over $64,200
$75,001 to $165,700	$2,864 + 6.6% of the amount over $75,000
$165,701 to $268,300	$8,850 + 7.6% of the amount over $165,700
Over $268,300	$16,647 + 8.75% of the amount over $268,300

Source: Vermont Department of Taxes

Who has to file Vermont state income tax?

You must file a Vermont state income tax return if you: 

• Are a full-year resident and meet federal filing requirements. 
• Are a part-year resident with income earned in Vermont or from Vermont sources. 
• Are a nonresident who earned more than $1,000 from Vermont sources.
• Filed a federal income tax return.
• Earned or received more than $100 of Vermont income. 

Even if you don’t meet these thresholds, you may benefit from filing to claim a refund or certain Vermont tax credits. Filing also ensures compliance and avoids potential penalties.

How Vermont residency impacts tax filing

Vermont has three residency statuses for tax purposes: resident, part-year resident, and nonresident. Your residency status determines how much of your income is taxed by Vermont and which tax forms you need to file. 

The chart below breaks down each status and how it affects your Vermont state taxes. 

Residency status	Definition	How Vermont taxes Income
Resident	Lived in Vermont for the entire tax year or made Vermont your permanent home.	Taxes all income, regardless of where it’s earned.
Part-year resident	Lived in Vermont for part of the year or moved into or out of the state.	Taxes income earned during residency and Vermont-sourced income.
Nonresident	Lived outside Vermont but earned more than $1,000 from Vermont sources.	Taxes only Vermont-sourced income (such as rent from a property located in Vermont).

Other income tax considerations in Vermont

Vermont taxes different types of income based on factors like income source and any applicable exemptions. Let’s look at a few considerations for different income types: 

• Retirement and pension income tax: You can exclude the first $10,000 of certain retirement income. Taxpayers can claim only one of the following exemptions: Social Security, military retirement, civil service, or other retirement systems. 
• Investment income tax: You can exclude part of your net capital gains from taxable income with a flat or percentage exclusion. 
• Social Security income tax: You can reduce or eliminate Vermont tax on federally taxable benefits if you earn less than $75,000 as a joint filer, or $60,000 for other statuses. 
• Military income tax: Full-time active-duty pay is exempt from Vermont income tax when the pay is earned outside of Vermont. Other income may be taxable. Servicemembers living in Vermont due to orders are considered nonresidents for tax purposes. 

Vermont also imposes an estate tax on estates exceeding the federal filing threshold. The threshold for Vermont estate tax is $5 million.

Common Vermont state tax deductions and credits

Vermont offers several tax deductions and credits to provide financial relief and encourage investments in families, education, and the community. Below are some key deductions and credits available for Vermont taxpayers. 

Tax credit	Description	Amount
Vermont Charitable Contribution Tax Credit	5% credit on the first $20,000 in eligible charitable contributions.	Up to $1,000.
Charitable Housing Investment Tax Credit (HITC)	Encourages investments in housing charities; credit is the difference between actual and charitable interest income.	Limited to 3% of the average principal balance of investment during the year, with a $5 million annual cap on total charitable investments.
Vermont Child Tax Credit	Financial support for families with young children.	$1,000 per eligible child.
Vermont Child and Dependent Care Credit	Credit is a percentage of the federal Child and Dependent Care Tax Credit.	72% of the federal credit; maximum federal credit for 2024 tax year is $6,000.
Vermont Earned Income Tax Credit (EITC)	For low- to moderate-income working individuals and families.	38% of the federal EITC; maximum federal credit for 2024 tax year is $7,830.
Elderly or Permanently Disabled Tax Credit	Support for seniors and disabled individuals with limited retirement or disability income.	24% of the federal credit; maximum federal credit for 2024 tax year is $7,500.
Vermont Farm Income Averaging Credit	Stabilizes farm income by averaging farm profits over years.	24% of the federal credit; federal credit varies based on individual circumstances.
Vermont Higher Education Investment Plan (VHEIP) or Vermont 529 (VT529) Plan	Encourages saving for education expenses through eligible accounts.	10% of the first $2,500 per taxpayer per beneficiary.

How to file Vermont state income tax

Filing your Vermont taxes doesn’t have to be a chore. With TurboTax, you’ll get the guidance and tools to make it seamless. 

TurboTax is designed to help you find every deduction and credit Vermont offers, whether you’re filing on your own or prefer expert support. Need personalized help? TurboTax professionals are ready to provide tailored advice or handle your filing from start to finish. 

We make sure your taxes are accurate, your refund is maximized, and your experience is stress-free.