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Vermont Tax Brackets 2026: 3.35% to 8.75% in Four Rates

Updated October 8, 2026. Quick answer: Vermont’s 2026 withholding tables from the Department of Taxes use four rates: 3.35%, 6.60%, 7.60% and 8.75%. On the annual single table, wages after allowances up to $3,925 carry no withholding, 3.35% applies to $3,925 through $54,675, and 8.75% starts above $260,225. These are withholding tables, not a printed 2026 return rate schedule.

The 2026 Vermont withholding rates

Single, annual wages after allowancesWithholding
$0 to $3,925$0 withheld
$3,925 to $54,6753.35%
$54,675 to $126,775$1,700.13 plus 6.60%
$126,775 to $260,225$6,458.73 plus 7.60%
Over $260,225$16,600.93 plus 8.75%

The percentage method tells employers to “use wages after subtracting withholding allowances”. Married filers use a separate table: $0 withheld to $11,775, 3.35% to $96,475, then $2,837.45 plus 6.60% to $216,525, $10,760.75 plus 7.60% to $323,825, and $18,915.55 plus 8.75% above that. “Civil union partners use Married table”.

Allowances and the standard deduction

For 2026 the Department says “one withholding allowance equals $5400.00” on an annual payroll. That is a withholding allowance. The documents read do not print a Vermont standard deduction or return exemption for 2026, so none is stated here.

A worked example

As a computed example (an illustration, not a source figure), take $100,000 of Vermont taxable income. On the annual single table, withholding on $100,000 of wages after allowances is $4,691.58 (computed): $1,700.13 plus 6.60% of the amount over $54,675. This is a withholding figure, not a final tax bill.

On the married table the same wages give $3,070.10 (computed): $2,837.45 plus 6.60% of the amount over $96,475.

What this page does not say

The Department’s 2026 return rate schedule could not be read, so these are withholding brackets and may differ from the schedule on a filed return. No 2026 standard deduction or exemption amount for returns appears in the documents read, and the Vermont statute was not read.

Common mistakes

  • Reading the withholding table’s $0 first band as a tax-free band on the return.
  • Using the single table for a married or civil union couple.
  • Treating the $5400.00 withholding allowance as a standard deduction.

Related: how Vermont taxes retirement income, whether Vermont taxes pensions, how Vermont taxes capital gains, and the federal 2026 tax brackets.

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Sources

Sources: the primary documents linked above, read on October 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.

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