Vermont State Income Tax 2023 - 2024

Vermont state income tax rates range from 3.55% to 8.95%. These tax rates apply to taxable income, which is adjusted gross income plus your deductions, exemptions, and adjustments. Taxable income is often lower than total earnings because you only pay taxes on your ordinary income, not long-term capital gains or dividends. Those with a taxable income over $100 must file an individual state income tax return. The state also collects sales taxes and property taxes. These additional taxes contribute significant revenue to the state’s spending budget.

Generally, anyone who earns income from work performed in Vermont must pay state income tax on that income. This includes people who work remotely from home, a co-work space, or another location within the state. Income tax withholding is based on the information reported to the state in Form W-4VT. There are a number of deductions available, including the standard deduction, the credit for child and dependent care expenses, and the credit for the elderly or disabled. Some of these credits are based on federal tax laws, while others are specific to the state of Vermont.

Vermont State Income Tax Due Dates

The IRS has extended filing and payment deadlines for people and businesses in Vermont impacted by severe flooding. The tax relief is available to any individual or business located in the 14 counties declared a disaster area by the federal government. The extension applies to various filings and payments, including individual tax returns on extension that are due October 16 or later, quarterly estimated income taxes normally due September 15 or October 16, and business excise and payroll tax deposits.

Payroll taxes are one of the most complex business aspects, and regulations vary by state. Vermont has three primary types of state payroll taxes: income tax withholding, unemployment insurance taxes, and health care fund contributions.

Keeping up with these obligations can be challenging for employers. To avoid penalties, it is important to file and pay payroll taxes by their original due dates. The best way to ensure compliance is by using a solution like Rippling, which automates all state and local payroll tax filings and payments. This reduces the stress of managing payroll taxes and ensures that all forms are submitted accurately and on time.