Vermont State Income Tax Withholding
Last Updated: January 2026
Overview
Vermont uses a progressive income tax system with four tax brackets. Vermont has one of the higher top marginal rates in the nation and requires employees to complete a state-specific withholding form.
2026 Tax Rates
Single Filers
| Taxable Income | Tax Rate |
|---|---|
| $0 - $45,400 | 3.35% |
| $45,401 - $110,050 | 6.60% |
| $110,051 - $229,550 | 7.60% |
| Over $229,550 | 8.75% |
Married Filing Jointly
| Taxable Income | Tax Rate |
|---|---|
| $0 - $75,850 | 3.35% |
| $75,851 - $183,400 | 6.60% |
| $183,401 - $279,450 | 7.60% |
| Over $279,450 | 8.75% |
Top Marginal Rate: 8.75%
Deductions and Exemptions
Standard Deduction (2026)
| Filing Status | Amount |
|---|---|
| Single | $7,400 |
| Married Filing Jointly | $14,800 |
| Head of Household | $11,100 |
Personal Exemption
- Amount: $5,100 per allowance (2026)
- Phase-out: Begins at $150,000 AGI (single) / $200,000 (MFJ)
Supplemental Wage Rate
- Supplemental wages: 8.75% (top marginal rate) or use wage bracket method
Special Considerations
- Form W-4VT: Vermont REQUIRES employees to complete Form W-4VT for state withholding (federal Form W-4 is not sufficient)
- No Local Income Taxes: Vermont does not have local income taxes
- Earned Income Tax Credit: Vermont offers a state EITC equal to 38% of the federal credit
Form W-4VT Requirements
Employees must complete Vermont Form W-4VT to indicate:
- Filing status for Vermont purposes
- Number of allowances
- Additional withholding amount (if any)
- Exempt status (if applicable)
New Employees: Must complete Form W-4VT within the first few days of employment. If not received, withhold at the highest rate (single, zero allowances).
Paid Family and Medical Leave
Vermont's Paid Family and Medical Leave program begins in 2025:
- Voluntary for employers with fewer than 50 employees
- Mandatory for larger employers in phases
- Check Vermont Department of Labor for current requirements