Getting Started

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:

                1.  a Vermont resident or
                2. a nonresident of Vermont for services performed in Vermont.

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?

For more information, check our FAQ page for a list of common questions about withholding tax, how taxes affect your business, and find out what steps you need to take to hire your first employee.

Contact Us

Commissioner Kaj Samsom
133 State Street | Montpelier, VT 05633
(802) 828-2505

Taxpayer Assistance Window
Located on the 1st Floor
Service Hours: 7:45 a.m. - 4:30 p.m. Monday - Friday

Contact a Specific Tax Section