Vermont Financial Calculators

Vermont's progressive income tax climbs to 8.75% — the third-highest top rate in the nation — and its property taxes rank among the steepest. At the same time, the Green Mountain State is in the middle of a semiconductor expansion, a remote-worker relocation boom, and a housing crunch that has pushed the median home price past $350,000. These calculators use 2026 federal and Vermont-specific data to show what your paycheck actually delivers. Our Vermont Paycheck Calculator computes your exact take-home pay after both state and federal deductions.

8.75% Top Rate: Vermont's Progressive Income Tax

The Four-Bracket Structure

Vermont's income tax uses four brackets with rates from 3.35% to 8.75%, per the Vermont Department of Taxes. For single filers in 2025, the first $3,825 of taxable income faces a 0% rate (effectively a built-in exemption). Income from $3,826 to $53,225 is taxed at 3.35%, $53,226 to $123,525 at 6.6%, $123,526 to $253,525 at 7.6%, and everything above $253,525 at 8.75%. Joint filers have wider brackets.

The 8.75% top rate trails only California (13.3%) and Hawaii (11%) among the states. Even the middle bracket at 7.6% exceeds the top rate in most states. A single earner making $80,000 owes roughly $4,100 in Vermont income tax before credits — compared to about $2,000 in Arizona (flat 2.5%) or $3,760 in Colorado (flat 4.4%). Federal withholding, Social Security (6.2% up to $184,500), and Medicare (1.45% plus 0.9% above $200,000) layer on top. Use our Vermont Paycheck Calculator to see the combined impact.

Credits That Soften the Blow

Vermont offers a state earned income tax credit equal to 38% of the federal EITC — one of the most generous in the nation. Social Security benefits are exempt from Vermont income tax for single filers with adjusted gross income below $50,000 and joint filers below $65,000, per the Tax Foundation. Above those thresholds, benefits may be partially taxed following federal rules. These credits and exemptions soften the effective rate for lower- and middle-income earners, though higher-income households feel the full weight of the bracket structure.

GlobalFoundries, Healthcare, and the Remote-Work Wave

A $16 Billion Semiconductor Bet

GlobalFoundries operates a semiconductor fabrication facility in Essex Junction — one of the largest manufacturing operations in New England. In June 2025, the company announced a $16 billion investment to expand chip manufacturing across its Vermont and New York facilities, with $1.5 billion in CHIPS Act funding. The Vermont campus is developing licensed TSMC gallium nitride (GaN) technology, with volume production scheduled for late 2026. For a state of 650,000 people, this level of advanced manufacturing investment is transformative.

Healthcare and Education as Economic Anchors

The University of Vermont Medical Center in Burlington is the state's largest employer, serving as a regional healthcare hub for northern New England. The University of Vermont, Middlebury College, and Norwich University add thousands of education-sector jobs. Tourism drives significant seasonal revenue — ski resorts like Stowe, Killington, and Sugarbush in winter, and the fall foliage corridor in autumn.

The median household income is approximately $68,000, below the New England average, reflecting the rural character of much of the state. Despite low wages relative to New England peers, Vermont consistently ranks among the top states for education quality, public health outcomes, and environmental stewardship — metrics that attract residents who weigh quality of life alongside income.

Remote Workers: Vermont's Recruitment Strategy

Vermont was among the first states to offer financial incentives for remote workers to relocate. The Worker Relocation Incentive Program provides grants of up to $7,500 to help cover moving costs for both people taking Vermont-based jobs and remote workers bringing their existing jobs with them. The influx has boosted local economies in Burlington, Woodstock, and Brattleboro — but it has also intensified the housing squeeze in a state where inventory was already chronically tight. Vermont's population remains under 650,000, making it the second-least-populous state, and even modest waves of new arrivals create outsized pressure on a small housing stock.

Property Taxes: Among the Highest in the Nation

Vermont's average effective property tax rate is approximately 1.86% (Tax Foundation), well above the national average. The rate funds a statewide education finance system where the education tax rate for each town is determined by local school spending relative to the statewide average — communities that spend more per pupil face higher education property tax rates.

On a $370,000 home, annual property taxes average roughly $6,880. Chittenden County (Burlington metro) carries the highest median bills in the state — over $6,500 — reflecting both high home values and urban school spending. Vermont offers a Property Tax Adjustment credit for homeowners whose taxes exceed a set percentage of household income, providing meaningful relief for lower-income households. Beginning in 2025, a Statewide Adjustment was implemented to address property value disparities that emerged across municipalities.

Sales Tax, Meals Tax, and Everyday Costs

Vermont's general sales tax rate is 6%, with a 1% local option tax in municipalities like Burlington, Hartford, and Middlebury bringing the total to 7% in those areas. Clothing and groceries are exempt — a daily savings that helps offset the state's high income and property taxes. However, restaurant meals carry a 9% tax rate (plus local additions), and alcoholic beverages sold on-premises face 10%. Burlington's combined meals and alcohol taxes are among the steepest in the Northeast for a city its size.

Heating catches transplants off guard. Vermont winters routinely bring subzero temperatures, and many homes — especially outside Burlington — rely on fuel oil or propane. A typical winter heating bill runs $2,000–$3,500, and electricity rates rank among the highest nationally. The state has invested in weatherization programs and renewable energy incentives (including strong residential solar terms), but energy costs remain a significant line item in any Vermont household budget.

Vermont vs. New Hampshire: The Tax Trade-Off Next Door

Vermont and New Hampshire share a border and a culture but occupy opposite ends of the tax spectrum. New Hampshire charges no income tax and no sales tax. Vermont charges up to 8.75% on income and 6–7% on purchases. A household earning $100,000 saves roughly $5,000–$6,000 per year in income tax alone by living across the Connecticut River in New Hampshire.

But the math has nuances. Vermont's property tax rate (1.86%) and New Hampshire's (1.61%) are closer than the income tax gap. Vermont's public services — road maintenance, healthcare access, and education funding — are generally rated higher, which matters for families. The choice often comes down to income level: higher earners save more in New Hampshire, while lower-income households may benefit from Vermont's 38% EITC and property tax adjustment credits that New Hampshire doesn't offer. Use our Compound Interest Calculator to model how the annual tax savings would compound over a career.

Retirement in the Green Mountains

Vermont exempts Social Security benefits from state tax for filers below $50,000 (single) or $65,000 (joint). Above those thresholds, benefits may be partially taxed — making Vermont one of a shrinking number of states that still taxes Social Security at higher income levels. Other retirement income (pensions, 401k, IRA) faces the standard progressive rates. The state has no estate or inheritance tax.

For retirees who own their homes, the property tax adjustment credit can provide significant relief if taxes exceed a set percentage of household income. The bigger practical challenge is Vermont's rural character: healthcare access, grocery stores, and services may require longer drives outside Burlington. Winter isolation is real in the Northeast Kingdom.

Retirees who value natural beauty, community, and outdoor recreation often thrive here — those who prioritize convenience and warm winters find the trade-offs steep — though some retirees split time between Vermont summers and warmer locations in winter, maintaining residency for tax purposes while avoiding the harshest months. Use our Retirement Calculator to model how Vermont's tax structure affects your retirement income over time.

Housing Squeeze: From Burlington to the Northeast Kingdom

Vermont's median home price has climbed to approximately $370,000, driven by limited inventory and demand from remote workers relocating from higher-cost metros. Burlington — the state's only city above 40,000 people — has a median well above $400,000, and popular resort towns like Stowe and Manchester push past $500,000. The Northeast Kingdom (the rural northeastern corner) remains the most affordable region, with homes available under $250,000 — but with fewer services and longer drives to employment centers.

The affordability math is challenging. Household income grew roughly 15% between 2019 and 2024, while home prices jumped over 50%. In 2019, a household at the median income could afford about half of homes on the market; by 2024, that share had dropped to roughly a third. Heating costs add another layer: many Vermont homes rely on fuel oil or propane, and a typical winter can cost $2,000–$3,500 in fuel. Electricity rates are among the highest in the nation. Use our Mortgage Calculator to estimate total monthly costs including Vermont's steep property taxes and energy expenses.

Despite the affordability crunch, Vermont's quality of life continues to attract buyers. The state's dairy farms, maple syrup producers (Vermont makes roughly 50% of U.S. maple syrup), craft breweries (including Hill Farmstead, widely ranked among the world's best), and artisan food scene contribute to a local economy that feels distinct from any other state. For buyers who value that character and can manage the tax burden, Vermont offers something that spreadsheets alone can't capture.

Key Financial Facts About Vermont

• State income tax: 3.35% to 8.75% progressive (3rd highest top rate nationally)
• Sales tax: 6% state + up to 1% local option (groceries and clothing exempt)
• Property tax: ~1.86% average effective rate (among the highest in the U.S.)
• Median home price: ~$370,000 (Burlington $400,000+)
• Median household income: ~$68,000
• Population: ~650,000
• EITC: 38% of federal credit
• Major employers: UVM Medical Center, GlobalFoundries, state government