Payments subject to Vermont Withholding Tax include wages, pensions, and annuities. Other payments are generally subject to Vermont income tax withholding if the payments are subject to Federal tax withholding and the payments are made to:
Our Income Tax Withholding Instructions, Tables, and Charts provide detailed information about:
- how Vermont income tax withholding is computed
- adjustments for services not performed in Vermont
- the effect of civil unions or civil marriages
- withholding requirements for annuities, supplemental payments and deferred compensation payments
- treatment of payments under a non-qualified deferred compensation plan;
- reporting and remitting Vermont income tax withheld, including reconciling your account
- Vermont withholding tables and wage bracket charts
Looking for prior year Income Tax Withholding Instructions, Tables, and Charts?
W-2 or 1099?
The Vermont Department of Taxes determines whether a person is an employee entitled to a W-2 form from the employer or an independent contractor entitled to a 1099. We use the ABC Test, also used by the Vermont Department of Labor for unemployment compensation purposes. Visit the Vermont Department of Labor’s website, Who is an Employee vs. Independent Contractor for further details.
Before You Open for Business
Vermont businesses, including nonprofits, must register for a Vermont Business Tax Account and license prior to collecting the withholding tax. Registration is free.
Ready to register for your business tax account?