Estimated income tax is the amount of Vermont tax you expect to owe for the year on income that is not subject to withholding. This includes earnings from self-employment, interest, dividends, rental income, alimony, etc., and any additions to your Vermont tax including the following:
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Qualified Retirement Plans such as Individual Retirement Accounts (IRA); Health Savings Accounts (HSA); and Medical Savings Accounts (MSA)
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Recapture of Federal Investment Tax Credit
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Vermont Tax Credit Recapture
Paying quarterly estimated income tax will help ensure your tax is paid accurately and timely. Avoid the shock of discovering you have not saved enough during the year to pay your taxes in April. Learn more about how to update your Income Tax Withholding.
Estimate Your Income Tax and Pay the Tax Each Quarter If
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you do not have Vermont income tax withheld from your pay.
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you do not have enough Vermont income tax withheld each pay period.
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you have Vermont income not subject to withholding tax.
For example, if you are self-employed, you should pay estimated income tax, or if you receive a substantial income in the form of dividends or interest.
Make Estimated Income Tax Payments If
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you are self-employed, you must pay your own estimated income taxes to the Department, usually quarterly. You must pay all other Vermont business taxes as they apply to your business.
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you think that your withholding will be less than 90% of your tax liability.
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you are a Vermont resident working in another state.
How to Calculate Your Payment
You should pay equal to the total amount for the year that is:
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equal to 100% of last year’s tax liability or
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90% of this year’s tax liability.
Attention Farmers and Fishers: By federal law, individuals receiving two-thirds of their income from farming or fishing, as defined by the IRS, are not required to make estimated income tax payments. If your bill includes penalty and interest on underpayment of estimated tax, contact the Department to have the bill adjusted.
Annualized Estimated Payments for Vermont
Individuals who make annualized estimated tax payments with the IRS may also make annualized estimated payments in Vermont. If you make annualized payments, please attach a completed copy of the following forms when you file your Vermont income tax return:
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Federal Form 2210 and
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IN-152A, Annualized Income Installment Method for Underpayment of Estimated Individual Income Tax
How to Make a Payment
Online
Make an electronic payment at any time in myVTax. Payments may be made by e-check (ACH Debit, which deducts funds directly from your financial institution account) or by credit card. Please note that for all credit card payments, a 3% convenience fee is added to the payment amount to reimburse the State of Vermont for credit company fees. Go to myVTax.
How to Videos
Personal Check or Money Order
Please complete and submit Form IN-114, Individual Income Estimated Tax Payment Voucher with your payment. Payments submitted without a voucher may be lost or misdirected which may result in late payment penalties. Submit your payment by mail.