Vermont State Tax Calculator (2026)

How Vermont taxes income

Vermont charges 3.35% to 8.75%. State tax is a separate calculation from your federal return rather than a share of it — Vermont sets its own schedule and its own definition of taxable income.

• Top marginal rate: 8.75%, reached at $249,700 for a single filer
• Brackets: 4 graduated bands, starting at 3.35%
• Standard deduction: $7,650 single / $15,300 joint
• Personal exemption: $5,300 single, $10,600 joint, $5,300 per dependent (not applied here)

Rate figures are as of January 1, 2026 and come from the published Tax Foundation compilation; they have not been independently checked against Vermont Department of Taxes. States do change rates mid-year, so confirm a figure there before relying on it.

What catches people out in Vermont

• Vermont has 4 brackets for a single filer, running from 3.35% on the first dollar up to 8.75% above $249,700.
• The Vermont standard deduction is $7,650 for a single filer and $15,300 for a couple filing jointly. It is a separate figure from the federal standard deduction and usually much smaller, so itemising is a decision you make once federally and again for the state.
• IMPORTANT ON CURRENCY: Vermont indexes both its brackets and its deduction annually and the figures here are the 2025 ones (footnotes j and n). The Vermont Department of Taxes publishes a tax rate schedule for each year, and the 2026 boundaries should be read from that rather than from here - secondary sources for Vermont's 2026 bands were found to disagree with each other, which is exactly the situation in which a tax page should cite the state and stop. The four rates of 3.35%, 6.6%, 7.6% and 8.75% are not in dispute. Where federal AGI exceeds $150,000 a Vermont filer pays the GREATER of the tax computed from these brackets or 3% of federal AGI (footnote hh), an alternative minimum this calculator does not apply, and filers receive an additional $1,250 deduction for each standard deduction box checked on federal Form 1040 (footnote mm).

What this estimate leaves out

Three things are deliberately outside this calculation, because they change more often than annually and a confident wrong number does real damage on a tax page.

• The personal exemption — $5,300 single, $10,600 joint, $5,300 per dependent — is not applied, so the figure runs slightly high.
• Local and city income tax is not included. New York City is the significant one nationally.
• State-specific credits, subtractions and income addbacks are out of scope and can move the result either way.

If you have income in India, Vermont is where treaty relief runs out

States are not parties to the India-US tax treaty, and a state credit for "taxes paid to other jurisdictions" almost always means other US states rather than other countries.

So NRO interest, Indian rental income or a gain on Indian shares can be taxed by Vermont with no credit for the Indian tax deducted at source — even though Form 1116 largely neutralises that same tax federally.

The treatment is not uniform across states, so treat this as the general position rather than as Vermont's confirmed one, and check the credit rules with Vermont Department of Taxes before relying on relief.

Sources

• Tax Foundation — 2026 State Income Tax Rates and Brackets
• Vermont Department of Taxes — the authority for Vermont