Vermont state taxes at a glance
| Individual income tax | Graduated (bracket) income tax |
|---|---|
| Rate structure | Four graduated rates: 3.35%, 6.60%, 7.60% and 8.75%, with a minimum tax of 3% of federal AGI for filers with AGI above $150,000. Verify current-year figures. |
| Tax agency | Vermont Department of Taxes |
| Main individual return | Form IN-111 (income tax return); Form HS-122 (homestead declaration and property tax credit) |
| Local income taxes | No local income taxes. Towns levy property taxes and may adopt a local option sales tax. |
| Sales tax | A 6% state rate plus a local option tax of up to 1% in some towns. |
| Property tax | Vermont uses a statewide education property tax with different rates for homestead and non-homestead property, plus local municipal taxes. A Homestead Declaration (Form HS-122) is filed with your income tax return to determine your rate and any income-based credit. |
| Retirement & Social Security | Vermont partly taxes Social Security benefits: a full exemption applies below income thresholds (about $55,000 single or $70,000 joint for 2025) and phases out above them. Other retirement income is generally taxable, with exclusions for certain pensions. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the Vermont Department of Taxes website.
How Vermont income tax works
Vermont’s income tax has four brackets: Tax Foundation’s 2026 table lists 3.35% on the first $49,400 for single filers, 6.60% to $119,700, 7.60% to $249,700, and 8.75% above that, with wider bands for joint filers. Taxpayers with federal AGI above $150,000 pay the greater of their calculated Vermont tax or 3% of federal AGI, according to Tax Foundation’s notes on Vermont, which can matter for people with large deductions or credits. Vermont’s standard deduction and personal exemption are set by the state and indexed, and the standard deduction has an extra amount for each age or blindness box checked on the federal return.
Vermont’s property tax system is part of the income tax filing. You file a Homestead Declaration (Form HS-122) each year with your income tax return (or by April 15), which tells the state whether your property qualifies as a homestead for the lower education tax rate, and it is also how you claim an income-based property tax credit; the Department says late declarations can incur penalties and claims generally cannot be accepted after October 15. Renters can also claim a rebate based on income and rent; see the Department for current rules.
Social Security is partly exempt. Vermont’s Department of Taxes publishes thresholds that move each year: for 2025, a full exemption applies below about $55,000 of AGI for single filers and $70,000 for joint filers, with a phase-out above that; the indexed 2026 thresholds are published with the IN-112 instructions. Our Social Security guide covers the federal rules. Vermont’s 6% sales tax has an optional 1% local add-on in some towns, and Tax Foundation counts Vermont among states whose combined sales tax rates rose in 2026.
Filing your Vermont return and free options
Form IN-111 cannot be e-filed directly through the state’s myVTax portal; instead you use an approved commercial software vendor. The Department’s Free File page lists free options for filers with AGI up to $89,000 through the Free File Alliance (with each provider’s own rules), and VITA offers free in-person help. myVTax is used for payments, notices and account information.
Remember to file the HS-122 homestead declaration each year with your return, because it affects your property tax bill. See our free filing hub for the federal return, extensions explained and state refund status.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things Vermont residents often ask about
- Homestead declaration is annual: file Form HS-122 with your return; late claims can be penalized or rejected.
- Minimum tax: filers with federal AGI above $150,000 pay the greater of the regular tax or 3% of federal AGI.
- No direct e-file on myVTax: use approved commercial vendors or paper for IN-111.
- Social Security thresholds change: check the Department’s IN-112 materials for the year you are filing.
- Local option sales tax: some towns add up to 1%.
Official Vermont links
- Vermont Department of Taxes
- Vermont: Free File
- Vermont: Form HS-122 homestead declaration instructions
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What are Vermont’s income tax rates?
Four rates: 3.35%, 6.60%, 7.60% and 8.75% in Tax Foundation’s 2026 table, plus a minimum tax of 3% of federal AGI for filers with AGI above $150,000.
What is the Vermont homestead declaration?
Form HS-122, filed with your income tax return, which determines your property tax rate and any income-based property tax credit.
Can I e-file my Vermont return directly with the state?
Not through myVTax. The Department says Form IN-111 must be filed through an approved commercial vendor or on paper; Free File options exist for eligible filers.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.