Free Tool
Vermont Tax Refund Calculator
Use this free calculator to estimate your Vermont state tax refund for the 2025-2026 tax year. Vermont uses a progressive income tax system with rates from 3.35-8.75%. Enter your income, filing status, and deductions below to see your estimated refund or balance due.
This calculator uses official Vermont Department of Revenue tax tables and standard deduction amounts for the 2026 tax year. Results are estimates and should be verified with a tax professional.
Vermont State Tax Calculator 2025-2026
Vermont Tax System Details
Vermont operates a progressive income tax system with 4 tax brackets. Tax rates range from 3.35-8.75%, applying to all taxable income earned by Vermont residents. The state standard deduction for 2026 is $7,300 for single filers and $14,700 for married filing jointly.
How Vermont Compares to Other States
Vermont's top rate of 8.75% is the highest in New England. New Hampshire has no income tax on wages, Massachusetts has a flat 5% rate, New York's top is 10.9%, and Maine's top is 7.15%. Vermont's high income taxes combine with some of the highest property taxes in the country (about 1.71% of home value).
A single filer earning $80,000 would pay approximately $4,320 in Vermont state tax.
Deductions and Credits Available in Vermont
Vermont offers a property tax adjustment credit, a renters' rebate credit, and an earned income tax credit (36% of the federal EITC — among the highest in the nation). Social Security benefits are fully exempt. A retirement income exclusion is available for low-income households.
For federal tax purposes, Vermont residents are significantly impacted by the $40,000 SALT deduction cap.
Sales Tax in Vermont
Vermont's state sales tax rate is 6% on most goods. Groceries, prescription drugs, and clothing are exempt. Property taxes average about 1.71% of home value, among the highest nationally.
Vermont Income Tax Overview
The standard deduction is subtracted from your gross income to determine your taxable income before the brackets are applied. Practical tip: the effective rate you actually pay is usually far lower than the top marginal rate. For typical middle-income earners, the effective state tax rate lands well below the headline rate.
The standard deduction directly reduces your taxable income before any tax brackets are applied. The state sales tax rate is 6% (avg combined 6.3%), which applies to most goods and some services depending on local laws. Property taxes in Vermont average approximately 1.82% of home value. For context, the national average property tax rate is roughly 1.1%. Residents should check their city and county rates, as local add-ons can significantly increase the combined sales tax rate above the state base rate.
Compared to neighboring states — New York (10.9%), Massachusetts (5%), New Hampshire (none) — Vermont offers a distinct balance of rates, deductions, and available credits that can significantly impact your total tax burden. For retirement income: SS exempt, $10,000 pension deduction 62+. VT has relatively high property tax rates. Vermont offers various state-specific deductions and credits that can reduce tax liability. The annual filing deadline for state income tax returns is April 15, matching the federal deadline. Taxpayers who cannot file by the deadline can request an automatic six-month extension, though any tax owed must still be paid by April 15 to avoid interest and penalty charges. Self-employed individuals, recent movers, and retirees with complex income sources should consult a qualified tax professional for personalized guidance.
Frequently Asked Questions About Vermont Taxes
What is the Vermont state income tax rate structure?
Vermont uses 3.35-8.75% progressive (5 brackets) system. This rate structure determines how much state tax you owe based on your taxable income after subtracting the standard deduction of $13,850 single / $27,700 married. Understanding where your income falls within this structure is the first step in estimating your state tax liability. Taxpayers should verify current year rates with the state department of revenue, as legislative changes can affect brackets and rates from year to year.
Does Vermont tax Social Security and retirement income?
SS exempt, $10,000 pension deduction 62+. Social Security benefits are generally treated favorably across most states, and Vermont follows this approach. However, federal taxation of Social Security may still apply based on your combined income level. Retirees should also consider how Vermont handles pension income, 401(k) withdrawals, and IRA distributions when planning their retirement budget, as state-level treatment varies significantly across the country.
What are the sales and property tax rates in
The Vermont state sales tax rate is 6% (avg combined 6.3%). Combined state and local rates can vary by city and county. Property taxes average approximately 1.82% of home value. VT has relatively high property tax rates. Taxpayers should consider these consumption-based and property-based taxes when evaluating their overall tax burden, as they can significantly affect the true cost of living in Vermont compared to other states with different tax structures.