Vermont has progressive income taxes up to 8.75% — among the highest in New England. Burlington, ski resorts, and a remote-worker economy trade higher taxes for exceptional quality of life.
Vermont taxes are calculated on federal taxable income (after the federal standard deduction of $16,100 single / $32,200 married). Vermont's four brackets capture most workers at 6.6%–7.6%. Burlington and the Champlain Valley are the population/economic anchor; ski resort communities (Stowe, Killington, Sugarbush) attract remote workers and high earners who accept VT's higher taxes for the lifestyle. No VT city levies a local income tax.
| Rate | Single Taxable Income | Married Filing Jointly |
|---|---|---|
| 3.35% | $0 – $45,400 | $0 – $75,600 |
| 6.60% | $45,400 – $110,050 | $75,600 – $183,400 |
| 7.60% | $110,050 – $229,550 | $183,400 – $229,550 |
| 8.75% | $229,550+ | $279,450+ |
Vermont uses federal taxable income (after federal standard deduction: $16,100 single / $32,200 married / $24,150 HOH) as its starting base. Approximate rates — consult VT Dept of Taxes for exact figures.
Vermont's 8.75% top income tax rate puts it among the highest-taxed states in the Northeast — above Massachusetts (5% standard, 9% on income over $1M), Maine (7.15%), and New Hampshire (0%). Yet Vermont consistently ranks among the top states for quality of life, healthcare access, education, and natural environment. For workers who prioritize livability over tax optimization, Vermont's trade-off is explicit and deliberate: you pay more in taxes and receive high-quality public services and a distinctive community culture in return.
Burlington and the Champlain Valley are Vermont's economic engine. Burlington (about 45,000 people) is Vermont's largest city — tiny by national standards but rich in tech companies, healthcare (UVM Medical Center), the University of Vermont, and a vibrant creative economy. Vermont has actively recruited remote workers through programs like "Remote Worker Grants" (offering cash incentives to people who move to Vermont and work remotely). The influx of high-earning remote workers from New York and Boston has driven home prices up significantly and created a new demographic of tech workers who accept Vermont's tax rates in exchange for the lifestyle.
Vermont's ski industry anchors the resort communities. Stowe (owned by Vail Resorts), Killington (the largest ski area in the East), Sugarbush, Mad River Glen, and others draw wealthy visitors and second-home owners. For ski industry workers — lifts, hospitality, rental shops — Vermont's progressive brackets mean most of these often-seasonal workers pay 3.35%–6.60% in state income tax, since ski industry wages tend to be moderate. Higher-earning ski town real estate agents, financial advisors, and medical professionals face the upper brackets.
Estimates only. VT uses federal taxable income base; rates 3.35%–8.75%. Consult a tax professional for exact Vermont withholding amounts.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| Vermont State Tax (3.35%–8.75%) | −$0.00 |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
Vermont has four progressive tax brackets: 3.35% on taxable income up to $45,400 (single), 6.60% on $45,400–$110,050, 7.60% on $110,050–$229,550, and 8.75% on income above $229,550. Vermont uses federal taxable income as its base. On a $75,000 salary (single), Vermont income tax is approximately $3,200–$3,500 per year — significantly higher than neighboring New Hampshire ($0) or Maine (around $2,800–$3,200).
Vermont exempts Social Security benefits from state income tax for single filers with AGI under $45,000 and married filers under $60,000. Above those thresholds, SS benefits are taxed proportionally. Military retirement pay is fully exempt. Other retirement income (401k, IRA distributions, pensions) is generally taxable at Vermont's regular progressive rates. Vermont also has an estate tax: 10%–16% on estates over $5 million, which affects higher-net-worth estates more than most states.
Vermont consistently ranks among the top states for quality of life, healthcare accessibility, education quality, low crime rates, and natural environment. The state has excellent public schools, a well-maintained infrastructure, and a distinctive community culture that values local businesses and sustainability. Burlington ranked among the best mid-size cities for quality of life by multiple rankings. The ski resort communities offer world-class recreation. For workers whose lifestyle preferences align with what Vermont offers, the higher tax rate is a known trade-off, not a hidden cost.
Vermont's "Remote Worker Grant" program has offered qualifying remote workers up to $7,500 in relocation grants (plus up to $5,000 for outdoor recreation costs) to move to Vermont and work remotely for an out-of-state employer. The program targets workers who want Vermont's lifestyle but whose jobs don't depend on a specific location. Recipients must remain Vermont residents for the grant period. Availability and funding levels vary by year — check with Vermont's Agency of Commerce and Community Development for current terms.
On $100,000 (single, 2026): Vermont taxable income after the $16,100 standard deduction = $83,900. Tax calculation: $45,400 × 3.35% = $1,521; ($83,900 − $45,400) × 6.60% = $2,541. Total Vermont income tax ≈ $4,062. Combined with federal income tax (~$12,000–$13,000) and FICA (~$7,650), your total annual tax burden is approximately $23,700–$24,700 on $100,000, for an estimated take-home of about $75,000–$76,000.