Clear Money Guide
What this state guide covers
A quick view of the questions, practical details and source notes below.
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Updated July 26, 2026. Quick answer (2026): If you are weighing a move out of Vermont in retirement, two things change when you leave Vermont: a top income-tax rate of 8.75% on withdrawals, and a tax at death. Four taxes change when you move — income tax on withdrawals, state estate tax, state inheritance tax, and what probate costs your heirs. This page prices all four for Vermont, then links a worked comparison for each destination.
What Vermont actually charges a retiree
| Tax | Vermont position, 2026 |
|---|---|
| State income tax | graduated, 3.35% to 8.75% top rate |
| Social Security | Partially taxed: full exemption if AGI is at or below $55,000 (single/HoH) or $70,000 (MFJ) – thresholds raised $5,000 by Act 71 of 2025, effective TY2025; partial exemption phases out over the next $10,000 of AGI ($55k-$65k / $70k-$80k); fully taxable above that. |
| Pension / 401(k) / IRA | Pensions, 401(k) and IRA withdrawals generally fully taxable. |
| Estate tax | yes – $5,000,000 exclusion (since 2021, not indexed); flat 16% on the Vermont taxable estate above $5M. VT Dept. of Taxes: tax ‘is assessed only on the gross estate value exceeding $5 million’ |
| Inheritance tax | none |
| Probate fee model | reasonable-fee |
| Probate filing fee | Probate filing fees are a statutory sliding scale by estate size under 32 V.S.A. §1434 (small estates pay a reduced fee); exact current tiers not verified this pass — marked not found rather than guessed. |
| Small-estate limit | $45,000 — small estate procedure where the estate consists entirely of personal property with fair market value ≤$45,000 and no real estate (other than a timeshare) (14 V.S.A. §1901(a); Vt. R. Prob. P. 80.3). |
Both halves matter
Vermont taxes retirement withdrawals and levies a tax at death. A comparison that prices only the first will understate what a move is worth, sometimes by an order of magnitude, because the death-tax threshold is a one-off on the whole estate rather than a percentage of one year’s income.
Where Vermont retirees go, and what each move is worth
Destinations below are drawn from documented retiree migration. Each links a worked, statute-cited comparison of all four taxes for that specific pair.
- Vermont to Florida — stop paying income tax on withdrawals and leave a death tax behind
- Vermont to New Hampshire — stop paying income tax on withdrawals and leave a death tax behind
Leaving is a sequence, not a single decision
The destination is only part of it: residency, accounts and property each have to be dealt with in some order, and an adviser can walk through that order with you before anything is signed or sold.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
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Getting the sequence right
Leaving Vermont cleanly is a sequencing problem as much as a tax one: domicile tests, what happens to property you keep behind, and the order of conversions and sales. See finding an advisor for a cross-state move for what to look for and the five questions to ask first.
Will Vermont still tax me after I move away?
Before the saving is real, the move has to survive an audit. The state you are leaving is the one that examines it, and the “six months and a day” rule is not the test — what actually changes your domicile, and why 183 days can trap you rather than free you.
Not on your retirement withdrawals, once you genuinely change domicile — but that is a harder test than a change of address, and what you leave behind stays in reach.
- Domicile is a test, not an address. Vermont can audit a departing resident. Days present, licence, registrations, where your advisers are and where you keep what you value all count.
- Property left behind stays reachable. Keeping a home in Vermont can keep part of your estate inside Vermont rules.
- Sequence any Roth conversion. It is taxed where you are domiciled in the year you convert — see how all 51 jurisdictions tax Roth conversions.
Full Vermont detail: Vermont retirement taxes. All corridors: retirement tax relocation hub.
Getting the order right
Move timing, conversion sequencing and estate exposure interact, and the order changes the total. Know what advice should cost before you buy it — see our advisor cost guide.
Cite or share this guide
Suggested citation: Clear Money Guide, “Leaving Vermont in Retirement: the 2026 Tax Position,” statute-cited; clearmoneyguide.com/leaving-vermont-retirement-taxes/. Free to cite with attribution. Download the full dataset as CSV, or contact contact@clearmoneyguide.com for custom cuts.
Primary sources
- 32 V.S.A. § 5830e (retirement income exemptions)
- Vermont Act 71 (2025, S.51)
- VT Dept. of Taxes: Social Security Exemption page
- 32 V.S.A. sec. 7442a
- 14 V.S.A. §1901(a)
- 32 V.S.A. §1434