Vermont State Tax Rate Guide 2025-2026 Explained – Stay informed with the latest Vermont state tax rates for 2025 and 2026. This comprehensive guide breaks down personal income tax brackets, sales tax, property taxes, corporate rates, and more using official Vermont Department of Taxes data and trusted sources like the Tax Foundation. Whether you’re a resident, business owner, or planning a move to Vermont, understanding these rates helps you file accurately and minimize your liability.
Vermont Personal Income Tax Rates and Brackets for 2025
Vermont levies a progressive state income tax on taxable income after federal adjustments and Vermont-specific modifications. For tax year 2025 (returns filed in 2026), the rates range from 3.35% to 8.75%. Brackets are adjusted annually for inflation.
Here are the official 2025 Vermont income tax rate schedules (Schedule X, Y-1, Y-2, and Z). Tax is calculated as base tax plus the percentage on the amount over the lower threshold. For incomes under $75,000, use the Vermont tax tables; higher incomes use these schedules.
Single Individuals (Schedule X)
- $0 – $49,400: $0 + 3.35%
- $49,400 – $75,000: $1,655 + 6.60% of amount over $49,400
- $75,000 – $119,700: $3,345 + 6.60% of amount over $75,000
- $119,700 – $249,700: $6,295 + 7.60% of amount over $119,700
- $249,700 and over: $16,175 + 8.75% of amount over $249,700
Married Filing Jointly / Qualifying Widow(er) / Civil Union Filing Jointly (Schedule Y-1)
- $0 – $75,000: $0 + 3.35%
- $75,000 – $82,500: $2,513 + 3.35% of amount over $75,000
- $82,500 – $199,450: $2,764 + 6.60% of amount over $82,500
- $199,450 – $304,000: $10,482 + 7.60% of amount over $199,450
- $304,000 and over: $18,428 + 8.75% of amount over $304,000
Head of Household (Schedule Z)
- $0 – $66,200: $0 + 3.35%
- $66,200 – $75,000: $2,218 + 6.60% of amount over $66,200
- $75,000 – $171,000: $2,799 + 6.60% of amount over $75,000
- $171,000 – $276,850: $9,135 + 7.60% of amount over $171,000
- $276,850 and over: $17,179 + 8.75% of amount over $276,850
Married Filing Separately / Civil Union Filing Separately (Schedule Y-2)
- $0 – $41,250: $0 + 3.35%
- $41,250 – $75,000: $1,382 + 6.60% of amount over $41,250
- $75,000 – $99,725: $3,609 + 6.60% of amount over $75,000
- $99,725 – $152,000: $5,241 + 7.60% of amount over $99,725
- $152,000 and over: $9,214 + 8.75% of amount over $152,000
Note: Vermont does not have a 0% bracket like some states; the lowest marginal rate applies immediately after deductions and exemptions. Civil union partners follow the married charts.
What to Expect for Vermont Income Tax in 2026
Vermont releases updated rate schedules and tax tables each December for the following tax year. For tax year 2026, expect the same marginal rates (3.35% to 8.75%) with brackets adjusted upward for inflation. The top 8.75% bracket currently begins around $260,000+ for single filers (exact 2026 figures are available on the Vermont Department of Taxes website).
Withholding tables and instructions for 2026 are already published. Check tax.vermont.gov for the latest RateSched-2026.pdf and TaxTables-2026.pdf before filing in 2027.
Vermont Sales and Use Tax Guide 2025-2026
Vermont’s statewide sales tax rate remains 6% on most tangible personal property and certain services in both 2025 and 2026. This rate is stable and applies to clothing, electronics, furniture, and more.
- Local option tax: Some municipalities add a 1% local sales tax, bringing the combined rate to 7% in those areas.
- Use tax: If you buy out-of-state without paying sales tax, you owe Vermont use tax at the same 6% rate (or 7% locally).
- Exemptions: Groceries, prescription drugs, and certain manufacturing equipment are generally exempt.
The sales tax rate has not changed for 2025-2026. Always verify local rates for specific towns using the Vermont Department of Taxes resources.
Vermont Property Tax Rates Explained for 2025-2026
Vermont does not have a single statewide property tax rate. Instead, education property taxes (the largest component) are determined annually by statewide “yields” set by the legislature, with local rates varying by town and school district.
- Effective property tax rate: Vermont’s average effective rate on owner-occupied homes is approximately 1.42% (one of the higher rates nationally).
- FY2026 (2025-2026 school year): The legislature took action to limit average education property tax bill increases. Early projections showed potential hikes near 6%, but surplus funds and budget adjustments brought the statewide average increase closer to manageable levels (exact town-by-town rates are published on tax.vermont.gov/ed-rates).
- Homestead vs. non-homestead: Different rates apply depending on whether the property is your primary residence.
Property taxes fund education primarily and are billed locally. Check your town’s CLA (Common Level of Appraisal) and specific rates for precise calculations.
Corporate Income Tax in Vermont: Rates for Businesses
Vermont’s corporate income tax is graduated and applies to net income apportioned to the state (single-sales-factor apportionment since 2023). Rates for 2025 and 2026:
- $0 – $10,000: 6.0%
- $10,001 – $25,000: 7.0%
- $25,001 and over: 8.5%
A minimum tax applies based on Vermont gross receipts ($100 to $100,000). Most corporations use the single-sales-factor method. Rates remain unchanged for 2026.
Additional Vermont Taxes You Should Know
- Estate Tax: Vermont imposes its own estate tax with a $5 million exemption (adjusted periodically). Rates up to 16% apply above the exemption.
- Meals and Rooms Tax: Generally covered under the 6% sales tax framework, though some lodging may have additional considerations—confirm with the Department of Taxes.
- Gas Tax and Other Excises: Vermont has fuel taxes and other selective excises that support infrastructure.
No local income taxes exist in Vermont.
How to File Your Vermont State Tax Return?
Vermont state tax returns are due April 15, 2026, for tax year 2025 (same as federal). Use Form IN-111 and file electronically via MyVTax for faster refunds. Part-year residents and non-residents must allocate Vermont-source income.
Tax Credits, Deductions, and Relief Programs in Vermont
Vermont offers numerous credits including the property tax credit (Circuit Breaker), earned income tax credit, and child and dependent care credits. Standard deductions and personal exemptions align closely with federal rules but include Vermont modifications. Check the latest tax credits page on tax.vermont.gov for 2025-2026 eligibility.
Tips for Minimizing Your Vermont Tax Burden
- Maximize allowable deductions and credits.
- Consider retirement contributions and Vermont-specific savings programs.
- Business owners should review apportionment and minimum tax rules.
- Use official withholding calculators to avoid underpayment penalties.
- Consult a tax professional for complex situations like multi-state income or estate planning.
Navigating Vermont Taxes in 2025-2026
Vermont’s tax system features competitive progressive income tax rates (3.35%–8.75%), a moderate 6% sales tax, and locally administered property taxes with recent legislative efforts to control increases. Rates for 2025-2026 remain stable in structure, with annual inflation adjustments to brackets and yields. Always verify the most current schedules directly from the Vermont Department of Taxes at tax.vermont.gov, as official PDFs and updates are released each year.
Proper planning with these Vermont state tax rates can save you time and money. For personalized advice, contact a Vermont tax advisor or use MyVTax tools. Stay compliant and make the most of available credits in the Green Mountain State.