This article begins with a caveat rather than a number, because the honest version requires it.
Vermont's four tax rates for 2026 — 3.35%, 6.60%, 7.60% and 8.75% — are confirmed from the Department of Taxes' own GB-1210 withholding instructions, effective January 1, 2026.
Vermont's standard deduction and personal exemptions are a different matter. They exist — 32 V.S.A. 5811(21)(C) sets statutory base amounts, and subdivision (D) requires the Commissioner to adjust them annually for inflation. But the adjusted 2026 amounts had not been published when this site's dataset was compiled, and this site does not publish figures it cannot source.
So the figures below apply the brackets with no shelter subtracted. They are an upper bound. Your actual Vermont tax is lower — by roughly the shelter you are entitled to, times your marginal rate.
On $85,000 that upper bound is $4,005. A realistic figure, allowing for a typical shelter, is closer to $3,100.
A note before you start. This is general education, not tax advice. Federal figures are tax year 2026, from IRS Revenue Procedure 2025-32 and the Social Security Administration; Vermont's rates come from the Department of Taxes' GB-1210 for 2026, and its bracket threshold dollars are the confirmed 2025 figures, which the dataset records explicitly. Every dollar figure is computed by the same engine the site's calculators use, on a single filer with no dependents or pre-tax deferrals unless stated. Property tax is discussed qualitatively.
1. What Vermont takes — as an upper bound
| Amount on $85,000 | |
|---|---|
| Gross salary | $85,000 |
| Federal income tax | −$9,870 |
| Social Security (6.2%) | −$5,270 |
| Medicare (1.45%) | −$1,233 |
| Vermont income tax (upper bound) | −$4,005 |
| Take-home (lower bound) | $64,623 |
Across incomes, single filer:
| Salary | Vermont tax (upper bound) | Effective VT rate | Take-home |
|---|---|---|---|
| $30,000 | $1,005 | 3.35% | $24,280 |
| $45,000 | $1,508 | 3.35% | $36,830 |
| $60,000 | $2,355 | 3.92% | $48,035 |
| $85,000 | $4,005 | 4.71% | $64,623 |
| $120,000 | $6,318 | 5.27% | $86,932 |
| $175,000 | $10,498 | 6.00% | $120,381 |
Notice the first two rows are both 3.35%. That is the tell: with no shelter subtracted, a filer entirely inside the 3.35% bracket pays exactly the statutory rate on every dollar. In reality nobody does, because the shelter comes off first.
Run your own salary against Vermont's brackets2. How much lower is the real figure?
Work it out from the statute. 32 V.S.A. 5811(21)(C) sets the statutory base amounts: $6,000 for unmarried filers and married filing separately, $9,000 head of household, $12,000 married filing jointly — plus a personal exemption of $4,150 per person, and an extra $1,000 for each federal aged-or-blind deduction.
Those are 2018-era figures. Subdivision (D) requires them to be inflation-adjusted annually beginning with taxable year 2018, so the current amounts are meaningfully higher — and it is that adjusted figure that this dataset could not confirm.
A defensible estimate. If the base amounts have been adjusted broadly in line with inflation since 2018, a single filer's shelter in 2026 is somewhere in the region of $13,000 to $14,000 — a standard deduction near $8,000 plus a personal exemption near $5,300.
| Upper bound (no shelter) | With ~$13,500 sheltered | |
|---|---|---|
| Taxable income on $85,000 | $85,000 | $71,500 |
| Vermont tax | $4,005 | About $3,114 |
| Effective rate | 4.71% | About 3.66% |
So the real Vermont figure at $85,000 is roughly $890 below the table in section 1, and the gap is your shelter times 6.6%.
Why publish the upper bound at all? Because the alternative is publishing an estimate dressed as a fact. This site's standard is that every number is sourced or it does not ship — and where a figure cannot be sourced, saying so and giving the direction of the error is more useful than quietly guessing.
The direction is always the same: your real bill is lower, never higher.
3. The brackets
| Taxable income above (single) | Rate |
|---|---|
| $0 | 3.35% |
| $49,400 | 6.60% |
| $119,700 | 7.60% |
| $249,700 | 8.75% |
Married-joint thresholds are wider but not double — $82,500, $199,450 and $304,000 against $49,400, $119,700 and $249,700. Head of household sits between at $66,200, $171,000 and $276,850.
Vermont's 8.75% top rate is the fifth-highest in the country, and it begins at $249,700 of taxable income for a single filer.
The jump from 3.35% to 6.60% is the one that matters — 3.25 percentage points in a single step, at $49,400 of taxable income. For a single filer with a typical shelter that is around $63,000 of salary, which is where a great many Vermont professional salaries sit.
Vermont's rates are set in statute at 32 V.S.A. 5822 and are not indexed; only the thresholds are. The thresholds recorded here are the confirmed 2025 amounts, which the dataset discloses explicitly rather than presenting as 2026 figures.
4. Filing jointly
| Salary | Single VT tax | Joint VT tax | Difference |
|---|---|---|---|
| $30,000 | $1,005 | $1,005 | $0 |
| $45,000 | $1,508 | $1,508 | $0 |
| $60,000 | $2,355 | $2,010 | $345 |
| $85,000 | $4,005 | $2,929 | $1,076 |
| $120,000 | $6,318 | $5,239 | $1,079 |
| $175,000 | $10,498 | $8,869 | $1,629 |
At $30,000 and $45,000 the benefit is zero, because both filers are entirely inside the 3.35% bracket and that bracket has no threshold to widen.
Above $49,400 of taxable income the couple's wider brackets start to bite, reaching $1,076 at $85,000 and $1,629 at $175,000.
These figures inherit the same upper-bound caveat. With a real shelter applied, the joint benefit would also include the doubled deduction, adding several hundred dollars more.
5. What the paycheck actually looks like
On $85,000 as a single filer, on the upper-bound figure:
| Pay schedule | Gross per cheque | Net per cheque |
|---|---|---|
| Weekly (52) | $1,634.62 | $1,242.75 |
| Biweekly (26) | $3,269.23 | $2,485.50 |
| Semi-monthly (24) | $3,541.67 | $2,692.63 |
| Monthly (12) | $7,083.33 | $5,385.25 |
Biweekly and semi-monthly are not the same thing. Biweekly is 26 cheques — every other Friday — so two months a year carry three paydays. Semi-monthly is 24, on fixed dates, so every month carries exactly two. The annual total is identical; the monthly cash flow is not.
Your actual net per cheque will be higher than these figures, by roughly $34 a fortnight on the estimate in section 2.
Form W-4VT is Vermont's own withholding certificate, and Vermont requires it in circumstances where the federal W-4 alone will not do — the two systems diverged when the federal form dropped allowances and Vermont's did not.
Withholding is an estimate, not the tax. Over-withholding produces a refund; under-withholding a bill.
6. The 40% capital gains exclusion that almost certainly does not apply to you
Treat the 40% figure with care — it almost never reaches a brokerage portfolio.
32 V.S.A. 5811(21)(B)(ii) allows a subtraction of either:
- the first $5,000 of adjusted net capital gain income, or
- 40% of adjusted net capital gain from assets held more than three years.
The 40% branch expressly EXCLUDES gains from:
- real estate used as a primary or non-primary residence
- depreciable personal property other than farm property and standing timber
- stocks or bonds publicly traded or traded on an exchange, or any other financial instruments — regardless of whether sold by an individual or a business
So an ordinary investor selling appreciated index funds, individual stocks or bonds gets the flat $5,000 exclusion and NOT the 40% one.
The 40% branch is aimed at closely held business interests, farm property and standing timber — which, in a state with Vermont's agricultural and forestry economy, is a deliberate policy choice rather than an oversight.
| Realised long-term gain of $200,000 | Which branch | Vermont subtraction |
|---|---|---|
| Index fund held 10 years | $5,000 flat | $5,000 |
| Sale of a closely held Vermont business held 10 years | 40% branch | $80,000 |
| Sale of farm property held 10 years | 40% branch | $80,000 |
| Sale of a second home held 10 years | $5,000 flat | $5,000 |
Both branches are measured on adjusted net capital gain as defined in IRC section 1(h), reduced by qualified dividend income, and the total subtraction may not exceed a stated share of federal taxable income.
Anyone who has read that Vermont excludes 40% of capital gains and planned a share sale around it should read the exclusion list again.
7. Social Security: exempt below $55,000, then phasing out
Vermont is one of only eight states that still tax Social Security benefits in 2026.
The exclusion is FULL below the threshold and phases out linearly over the next $10,000 of federal AGI:
| Filing status | Full exclusion below | Zero above |
|---|---|---|
| Single / married-separate / head of household | $55,000 | $65,000 |
| Married filing jointly | $70,000 | $80,000 |
The $10,000 phase-out range is narrow, which makes the taper steep. A single filer's entire Social Security exclusion disappears across $10,000 of income — so inside that band, each extra $1,000 of AGI brings 10% of the benefit into tax as well as being taxed itself.
For a retiree with $25,000 of federally taxable benefits, crossing that band costs roughly $1,650 of Vermont tax on top of the tax on the income that carried them across it.
The thresholds are relatively low by comparison. Colorado's is $75,000, Connecticut's $75,000, New Mexico's $100,000, Minnesota's $86,410, Rhode Island's $107,000. Vermont's $55,000 is the lowest of the eight, which means it reaches more retirees.
8. The rest of retirement, which is narrow
Private pensions are fully taxable. Vermont grants no private pension exclusion of any kind.
Public pensions get a $10,000 exclusion, and it is narrower than the label suggests: the first $10,000 of Civil Service Retirement System income is excludable, and the same $10,000 treatment extends to other contributory annuity, pension, endowment or retirement arrangements of a comparable kind.
Military retirement gets a comparable partial exclusion.
401(k), 403(b) and traditional IRA distributions are fully taxable. Vermont's retirement exclusions under 32 V.S.A. 5830e are narrow and none of them reaches an ordinary private-sector qualified plan — they cover Social Security, Civil Service Retirement System income, other contributory arrangements of that type, and military retirement.
| Source | Vermont treatment |
|---|---|
| Social Security | Exempt below $55,000 of federal AGI, phasing out to $65,000 |
| Civil Service Retirement System | $10,000 exclusion |
| Military retirement | Partial exclusion |
| Public pension, contributory | $10,000 exclusion |
| Private pension | Fully taxed |
| 401(k), 403(b), traditional IRA | Fully taxed |
For a private-sector saver, Vermont is among the least generous states in the country on retirement income, and the low Social Security threshold compounds it.
That is the honest summary, and it stands separately from the upper-bound caveat: the rules are narrow regardless of what the deduction amounts turn out to be.
9. No local income tax — and a statewide education property tax
No Vermont town, city or school district levies a tax on personal income. Form IN-111 has no local income tax line and no local schedule.
But Vermont's education funding is unusual and it belongs in any honest cost comparison.
Vermont funds education statewide through an education property tax, levied at rates connected to each district's per-pupil spending, together with an income-based mechanism for eligible households.
Three consequences:
Your education property tax is connected to your district's spending decisions, not only to your property's value. A district that votes a larger budget raises its own rate.
Vermont operates an income-based property tax adjustment for eligible resident homeowners, which caps the education portion of the bill as a share of household income. It is claimed on the income tax return — which means a Vermonter's property tax bill and income tax return are linked in a way they are not in most states.
Overall property tax burden is high. Vermont's effective rates on owner-occupied housing are among the higher ones in the country, and for a homeowner that bill will typically exceed the income tax figures in section 1.
Anyone comparing Vermont with New Hampshire next door should compare both taxes together, because the two states have made opposite choices — New Hampshire has no income tax and very high property tax; Vermont has both an income tax and high property tax, with an income-based adjustment that softens the second.
10. Where Vermont ranks
At $85,000, Vermont's upper-bound $4,005 would be thirty-third of the 41 income-tax states. The real figure is lower — closer to $3,114 on the estimate in section 2, which would place Vermont around eighteenth.
That range is the honest answer, and its width is the point. An unsourced deduction amount moves a state fifteen places in a national ranking, which is why this site declines to guess at it.
Against its neighbours, on the upper bound:
| Salary | VT (upper bound) | NH | NY | MA | ME |
|---|---|---|---|---|---|
| $30,000 | $1,005 | $0 | $1,023 | $1,280 | $571 |
| $45,000 | $1,508 | $0 | $1,833 | $2,030 | $1,441 |
| $85,000 | $4,005 | $0 | $3,993 | $4,030 | $4,128 |
| $175,000 | $10,498 | $0 | $9,285 | $8,530 | $11,636 |
Even on the upper bound Vermont is close to New York and Massachusetts at $85,000, and on a realistic figure it is clearly below both.
At $175,000 Vermont's 7.6% and 8.75% brackets take over, and it becomes one of the more expensive states — second only to Maine among these five.
New Hampshire takes nothing on income, and its property tax is among the highest in the country. For anyone weighing the two, the education property tax in section 9 is the comparison that matters, not the income tax.
11. What you can control
Pre-tax deferrals save 6.6% at state level for an $85,000 earner. A $10,000 traditional 401(k) contribution saves $2,200 federally plus $660 in Vermont tax.
But read section 8. That money is fully taxable in Vermont when it comes out, at every age, because Vermont's exclusions do not reach a private-sector qualified plan. The deferral defers rather than avoids the state tax, and Vermont's rates in retirement may not be lower than they are now.
HSA contributions through payroll cut federal tax, Vermont tax and FICA. On $4,400 that is roughly $968 federal, $290 Vermont and $337 FICA — about $1,595, or 36% of the amount contributed.
Do not plan a share sale around the 40% capital gains exclusion. Section 6 sets out why it does not reach publicly traded securities.
Watch the Social Security band if you are near it. $55,000 to $65,000 of federal AGI is where a single retiree's exclusion disappears, and the timing of a withdrawal or conversion can keep you below it.
And claim the income-based property tax adjustment if you are eligible — it is claimed on the income tax return and it is worth more than most of what is on this list.
Frequently asked questions
What is Vermont's income tax rate? Four brackets: 3.35%, 6.60%, 7.60% and 8.75%, confirmed for 2026 from the Department of Taxes' GB-1210 withholding instructions. The threshold dollars used here are the confirmed 2025 figures.
Why does this article call its figures an upper bound? Because Vermont's standard deduction and personal exemption exist but their inflation-adjusted 2026 amounts had not been published when this dataset was compiled. Rather than guess, the figures apply the brackets with no shelter subtracted — so your real bill is lower, never higher.
How much lower is my real Vermont tax? Roughly your shelter times your marginal rate. On a plausible shelter of $13,000 to $14,000 for a single filer, the $85,000 figure falls from $4,005 to about $3,114.
Does Vermont tax Social Security? Yes, above $55,000 of federal AGI for a single filer, phasing out linearly to zero exclusion at $65,000. Married filing jointly runs $70,000 to $80,000. Vermont's threshold is the lowest of the eight states that still tax benefits.
Does Vermont exclude 40% of capital gains? Only from closely held business interests, farm property and standing timber held more than three years. The 40% branch expressly excludes publicly traded stocks and bonds, other financial instruments, and residential real estate. An ordinary investor gets a flat $5,000 exclusion instead.
Does Vermont tax my 401(k)? Yes, in full. Vermont's retirement exclusions under 32 V.S.A. 5830e cover Social Security, Civil Service Retirement System income, comparable contributory arrangements and military retirement — not an ordinary private-sector qualified plan.
Can a Vermont town tax my income? No. Vermont funds education through a statewide education property tax connected to district spending, with an income-based adjustment for eligible homeowners claimed on the income tax return.
How does Vermont compare with New Hampshire? New Hampshire takes nothing on income and has among the highest property taxes in the country. Vermont has both an income tax and high property tax, softened by an income-based adjustment. The comparison depends on your income, your house and your district — not on the income tax line.
What to do next
Vermont's rates are confirmed and its deduction amounts are not, so treat the figures here as a ceiling. The rules that matter most — the Social Security band, the narrow retirement exclusions, and the capital gains carve-out — are unaffected by that uncertainty.
- Vermont take-home pay calculator — your salary with every deduction shown separately, and the same caveat applied.
- Your Paycheck in the USA in 2026 — all fifty states on one salary.
- Take-Home Pay in New Hampshire — no income tax, very high property tax.
- How we source every number — including what happens when a figure cannot be sourced.
- 50/30/20 budget calculator — built on take-home rather than salary.
Figures in this article are illustrations computed by this site's own tax engine for tax year 2026, on a single filer with no dependents or pre-tax deferrals unless stated. Federal figures come from IRS Revenue Procedure 2025-32 and the Social Security Administration; Vermont's rates from the Vermont Department of Taxes GB-1210 for 2026, with bracket threshold dollars being the confirmed 2025 figures and statutory shelter provisions at 32 V.S.A. 5811(21). Vermont's inflation-adjusted 2026 standard deduction and personal exemption amounts were not confirmed to this dataset's primary-source standard, so the figures here apply the brackets with no shelter subtracted and are an upper bound rather than a prediction. The education property tax and its income-based adjustment are discussed qualitatively rather than computed. This is general education and not tax advice; consult a licensed tax professional for your own situation.