Vermont State Tax: Complete Rules and Extensions

• admin
• February 24, 2025
• 6 min read

Navigating Vermont’s State Tax System: A Comprehensive Guide for 2025

Navigating the complexities of Vermont’s state tax system, including sales tax and property taxes, can be daunting, especially with annual updates and changes. This comprehensive guide aims to demystify Vermont’s 2025 tax rules, providing clarity on corporate income tax, tax credits, revenue, tax brackets, extension procedures, and essential regulations to help you file accurately and on time.

Key Takeaways

• Understanding Vermont’s Tax Brackets: Vermont employs a progressive income tax system with rates ranging from 3.35% to 8.75%, varying by income and filing status.
• Filing Extensions: If you’re unable to meet the April 15, 2025, deadline, Vermont offers extension options to provide additional time for filing.
• Stay Informed on Tax Updates: Regularly consult official Vermont Department of Taxes resources to stay updated on any changes or new regulations.

Vermont’s Income Tax Structure

Vermont utilizes a progressive income tax system, meaning tax rates, separate from the federal income tax, increase with higher income levels. For the 2025 tax year, the state has established specific tax brackets based on filing status and taxable income.

Tax Rates and Brackets for 2025

The following tables outline Vermont’s income tax rates and corresponding brackets for various filing statuses:

Single Filers

Married Filing Jointly

Married Filing Separately

Head of Household

Source: Vermont Department of Taxes

Calculating Your Taxable Income

To determine your taxable income in Vermont:

1. Start with Federal Taxable Income: This is your income after federal adjustments and deductions.
2. Additions: Include interest from non-Vermont state and local bonds and any state and local income taxes deducted federally.
3. Subtractions: Deduct income from U.S. government bonds and the Vermont capital gains exclusion, if applicable.

By following these steps, you can ascertain your Vermont taxable income assessment and apply the appropriate, graduated tax rate, considering any applicable property tax and sales tax, based on your filing status.

Filing Deadlines and Extensions

The standard deadline for filing Vermont state income tax returns is April 15, 2025. If you’re unable to file by this date, Vermont provides an option to request an extension.

How to Request an Extension

1. Automatic Federal Extension: If you’ve obtained an automatic extension for your federal return, Vermont grants an automatic six-month extension for your state return.
2. Filing Form IN-151: If you haven’t filed for a federal extension, submit Vermont’s Form IN-151 to request an extension for your state return.

Note: An extension to file is not an extension to pay. Ensure any estimated taxes owed are paid by April 15, 2025, to avoid interest and penalties.

Staying Updated on Tax Changes

Tax laws can change, and staying informed is crucial. Regularly consult the Vermont Department of Taxes for the latest information, forms, and guidance.

Frequently Asked Questions

Are Social Security benefits taxable in Vermont?

Yes, Vermont taxes Social Security benefits for certain income levels. However, joint filers with an Adjusted Gross Income (AGI) of $65,000 or less may be exempt.

What is the Vermont estate tax exemption for 2025?

Vermont imposes an estate tax with an exemption threshold of $5 million. Estates exceeding this amount are taxed at a flat rate of 16%.

How can I check the status of my Vermont tax refund?

You can check your refund status online through the myVTax portal. Ensure you have your Social Security number and the exact refund amount handy.

Empower Your Tax Journey

Filing taxes in Vermont requires a solid understanding of the state’s progressive tax system, tax brackets, sales tax, and extension options. By staying informed about Vermont’s latest tax rules, ensuring timely payments, and leveraging available deductions, you can optimize your tax situation and avoid unnecessary penalties.

If you’re unsure about your tax liability or need assistance, consulting a tax professional or using Vermont’s online tax resources can provide clarity and ease the filing process. Stay proactive, plan ahead, and make tax season stress-free by keeping up with the latest updates from the Vermont Department of Taxes.

For more information on filing an extension, visit:

• Personal Tax Extension
• Business Tax Extension

By following this guide, you’ll be well-equipped to navigate Vermont’s tax system in 2025 and beyond.