Vermont has made the following changes for the 2021 tax year:
For tax year 2021, the Vermont personal exemption is $4,350.
According to the Vermont Government Website, "Household Income includes all income, taxable and nontaxable, of everyone who resided with you at any time during the tax year, including family and non-related individuals. If an individual resided with you for fewer than 12 months, include that individual’s income only for the time they resided with you."
Note: Stimulus payments are not considered Household Income
Unemployment Benefits, Extended Benefits, Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, and Hazard Pay and all now taxable by the state of Vermont.
If you are a non-resident of Vermont, but live and work there, you must pay Vermont taxes on the income you earn while living and working in Vermont, regardless of where your employer is located.
The Standard Deduction has increased for the following filing statuses:
- Single/Married Filing Separate - $6,350
- Married Filing Jointly - $12,700
- Head of Household - $9,500
- An additional $1,050 is added to your standard deduction if 65 or older and/or blind
Social Security Benefits Exemption
Social Security benefits are exempt from Vermont income tax if you qualify based on your Adjusted Gross Income and filing status. To find out if you qualify for full or partial exemption, use the Social Security Exemption Worksheet.
For more information, please click here.