Withholding

Federal Income Tax Withholding

The IRS encourages everyone to use the Withholding Calculator to perform a quick “paycheck checkup” for federal income tax. This is even more important this year because of changes to tax law in 2018. The calculator helps you identify your federal tax withholding to make sure you have the right amount of federal income tax withheld from your paycheck at work.

IRS Withholding Calculator

Vermont Income Tax Withholding

Payments subject to Vermont tax withholding 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.

The number of allowances used to calculate your Vermont Withholding will likely differ from your result using the IRS Withholding Calculator. To update your Vermont Tax Withholding, you should submit a Form W-4VT to your employer.

File a New Vermont W-4VT

Form W-4VT is designed so that you can have as much “take-home pay” as possible without an income tax liability due to Vermont when you file your tax return. Each withholding allowance you claim on Line 5 above will reduce the amount of income you are taxed on and therefore the amount of Vermont income tax withheld each paycheck.

Here are some things to remember as you complete your W-4VT:

  • Generally, dependents are children under 19 (or up to 24 if they are a full-time student) and any relatives who live with you and who you support financially.
  • If you and your spouse both claim your dependents on your respective W-4VTs, not enough income tax will be withheld, and you might end up with taxes due when you file. Only one spouse should claim the dependents.
  • If you entered an additional amount to be withheld on the federal W-4, consider entering 30% of that amount on Line 6.
  • If you have more than one employer, consider claiming zero allowances with the employer(s) where you earn less income.​

Here are some frequently asked questions about Vermont employee's withholding allowance certificates. 


Payments for Tax Withheld

Generally, your payment frequency will mirror your Federal payment frequency; for example, if you are required to pay your Federal Withholding Tax semiweekly, you are required to pay the Vermont Withholding Tax semiweekly.

Quarterly Payment frequency
You should pay the tax when you file Form WHT-436, Quarterly Withholding Reconciliation (see below):

Monthly Payment Frequency
You must pay withholding tax for the month by the 25th day of the following month. (Exception: January’s payment is due the 23rd day of February, but extended to the following Monday if the 23rd occurs on a weekend). For example, withholding tax for the month of June must be paid by July 25.  You should pay the first and second months by their due dates as stated above. The third payments should be made when you file Form WHT-436, Quarterly Withholding Reconciliation.

Semiweekly Payment Frequency
Tax withheld for pay dates on Wednesday, Thursday, or Friday is due the following Wednesday. Tax withheld for all other pay dates is due the following Friday.  The due date for payments will not usually coincide with the due date for Form WHT-436, Quarterly Withholding Reconciliation.


Reconciliations

Quarterly Reconciliations
All taxpayers (Semiweekly, Monthly, and Quarterly) are now required to file Form WHT-436, Quarterly Withholding Reconciliation, at the close of each quarter.

Annual Reconciliation
All taxpayers (Semiweekly, Monthly, and Quarterly) are now required to file Form WHT-434, Annual Withholding Reconciliation, due the last day of January. This form serves as the transmittal for forms W-2 or 1099 and reconciles the amount of Vermont income tax withholding reported during the year to the amount of withholding tax shown on the W-2 and/or 1099 forms.


Due Dates

The Vermont Department of Taxes determines the filing frequency for each taxpayer.  If the listed due date falls on a weekend or holiday, the due date is the following business day.

      


Filing Methods

Filing Online
All taxpayers may file returns and pay tax due for Withholding Tax using myVTax, our free, secure, online filing site. Filing online through the Vermont Department of Taxes new online system, myVTax, has been mandated by the Commissioner of Taxes beginning with the tax year ending Dec. 31, 2015 . The  Commissioner has mandated you pay tax if:

Are you ready to create an account in myVTax?

Filing Paper Returns
You may file using paper forms if:

  • you submit fewer than 25 W-2 and/or 1099 forms and
  • you pay withholding tax on the quarterly or monthly schedule and
  • you do not use a payroll filing service and
  • you cannot file and pay through myVTax

Form WHT-430, Withholding Tax Payment
Use this voucher for the first and second payments of each quarter if you are a monthly filer, are not mandated to use myVTax, and cannot file and pay through myVTax

Form WHT-436, Quarterly Withholding Reconciliation and instructions
All taxpayers must file this reconciliation every quarter. If you are a monthly payer, you should pay the first and second months by their due dates. The third month’s payment should be made when you file Form WHT-436, Quarterly Withholding Reconciliation. If you are a quarterly payer, you should pay when you file Form WHT-436, Quarterly Withholding Reconciliation.

Form WHT-434, Annual Withholding Reconciliation, instructions or online filing instructions
All taxpayers must file this reconciliation, every year.

Want to learn more about withholding tax?

LAWS, REGULATIONS AND GUIDANCE
32 V.S.A. § 5841-5844
32 V.S.A. § 5862d Filing of federal form 1099
Technical Bulletin 23 Income Tax Withholding
2019 Income Tax Withholding Instructions, Tables, and Charts