Vermont income tax brackets run from 3.35% to 8.75% across four marginal rates, and the dollar thresholds where each rate starts depend on your filing status and shift every year with inflation. The rates themselves stay put. What moves is the income cutoff between brackets, which the Vermont Department of Taxes recalculates annually using the Consumer Price Index for All Urban Consumers.1Vermont General Assembly. Vermont Code 32 – Tax on Income of Individuals, Estates, and Trusts
The thresholds shown below are the base statutory figures. Your actual bracket cutoffs for the current tax year will be slightly higher once inflation is applied, and the current rate schedules are published each year with the Form IN-111 instructions.
The Four Vermont Tax Brackets by Filing Status
Single Filers
- 3.35% on the first $38,700 of taxable income
- 6.60% on income from $38,700 to $93,700
- 7.60% on income from $93,700 to $195,450
- 8.75% on income above $195,450
Married Filing Jointly and Qualifying Surviving Spouses
- 3.35% on the first $64,600 of taxable income
- 6.60% on income from $64,600 to $156,150
- 7.60% on income from $156,150 to $237,950
- 8.75% on income above $237,950
Head of Household
- 3.35% on the first $51,850 of taxable income
- 6.60% on income from $51,850 to $133,850
- 7.60% on income from $133,850 to $216,700
- 8.75% on income above $216,700
Married Filing Separately
- 3.35% on the first $32,300 of taxable income
- 6.60% on income from $32,300 to $78,075
- 7.60% on income from $78,075 to $118,975
- 8.75% on income above $118,975
How the Marginal Rates Work
Each rate applies only to the slice of income that falls inside its range. Moving into a higher bracket does not re-tax the money below it.
Take a single filer with $70,000 in federal adjusted gross income. Say you earned $500 of interest on New York municipal bonds, which Vermont adds back because out-of-state municipal interest is taxable here, and $200 of interest on U.S. Treasury notes, which Vermont subtracts because federal obligations are exempt.2Vermont Department of Taxes. Vermont Tax Adjustments and Credits Modified AGI comes to $70,300. Subtract the 2025 standard deduction of $7,650 and the personal exemption of $5,300, and Vermont taxable income is $57,350.
Running that through the single-filer brackets: 3.35% on the first $38,700 is $1,296.45, and 6.60% on the remaining $18,650 is $1,230.90. Total before credits: about $2,527. Withholding from your paychecks and any credits you claim come off that figure to produce the final bill or refund.
Standard Deduction and Personal Exemption
The brackets apply to Vermont taxable income, not gross wages, so the deductions that shrink that figure matter as much as the rates. For tax year 2025:3Vermont Department of Taxes. Filing Season FAQs
- Single or married filing separately: $7,650 standard deduction
- Married filing jointly or qualifying surviving spouse: $15,300
- Head of household: $11,450
- Personal exemption: $5,300 per exemption
- Additional standard deduction for filers 65 or older or blind: $1,250
These amounts also adjust annually for inflation. Vermont taxable income begins with your federal AGI, picks up state-specific add-backs (out-of-state municipal bond interest is the common one), subtracts state-specific items (U.S. government bond interest, qualifying active-duty military pay earned outside Vermont), and then has the standard or itemized deduction and the personal exemption taken off. The result is the number you look up in the bracket schedule.
Social Security Benefits and the Brackets
Vermont fully or partially exempts federally taxable Social Security benefits depending on your AGI. For tax year 2025:4Vermont Department of Taxes. Social Security Exemption
- Single, head of household, married filing separately, or surviving spouse: full exemption at AGI of $55,000 or less, partial between $55,001 and $64,999, none at $65,000 and above
- Married filing jointly: full exemption at AGI of $70,000 or less, partial between $70,001 and $79,999, none at $80,000 and above
Partial exemptions scale down based on where your AGI sits in the phase-out range. The exemption only reaches benefits that were taxable on your federal return in the first place.
Credits That Reduce the Tax the Brackets Produce
Credits come off the tax figure after you apply the brackets, dollar for dollar.
The Vermont Child Tax Credit is a refundable $1,000 per qualifying child who is six or younger at year-end. It phases out above $125,000 AGI regardless of filing status, dropping by $20 per child for every $1,000 (or fraction) of income over the threshold, and disappears at $175,000.5Vermont General Assembly. Vermont Code 32 – Vermont Child Tax Credit Refundable means you receive it even if you owe no Vermont tax.
Vermont’s Earned Income Tax Credit equals 38% of the federal EITC. Qualifying federally qualifies you here, claimed on Schedule IN-112.6Vermont Department of Taxes. Tax Credits and Adjustments for Individuals A Renter Credit is also available based on income, family size, and months rented, with amounts set by the Department of Taxes each year.7Vermont Department of Taxes. Calculator and Credit Amounts
Who the Brackets Apply To
You file a Vermont return, and the brackets apply, if you are required to file federally, received more than $100 of Vermont income during the year, and are a full-year resident, part-year resident, or nonresident with Vermont-source income. Nonresidents have a higher floor and must file once Vermont-source income exceeds $1,000.8Vermont Department of Taxes. Who Should File
Vermont treats you as a full-year resident if you are domiciled here (your permanent home is Vermont) or you are a statutory resident (you keep a permanent place of abode in Vermont and are physically present more than 183 days during the tax year).9Vermont General Assembly. Vermont Code 32 – Definitions Part-year residents apply the brackets to all income earned during their Vermont period. Nonresidents apply them only to Vermont-source income, such as wages from a Vermont job or rent from Vermont property.