Estimated Income Tax

Overview

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:

  • Qualified Retirement Plans such as Individual Retirement Accounts (IRA); Health Savings Accounts (HSA); and Medical Savings Accounts (MSA)

  • Recapture of Federal Investment Tax Credit

  • 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.

You must estimate your income tax and pay the tax each quarter if you:

  • do not have Vermont income tax withheld from your pay

  • do not have enough Vermont income tax withheld each pay period

  • 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.

You need to make Estimated Income Tax payments:

  • if 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.

  • if you think that your withholding will be less than 90% of your tax liability

  • if 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:

  1. equal to 100% of last year’s tax liability or
  2. 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 you are billed 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: 

  • Federal Form 2210 and
  • IN-152A, Annualized Income Installment Method for Underpayment of 2017 Estimated Individual Income Tax

How to Make a Payment

Online
Make your payment by ACH Debit (NO FEE) using myVTax. You can also use your credit card to pay on this site, however there is a nonrefundable 3% fee which is retained by the service company.

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 can result in late payment penalties.

Pay by Credit Card

Pay by ACH Debit

Pay by Check

Forms and Publications

No. Instructions Title
2210 (IRS) Instructions Underpayment of Estimated Tax by Individuals, Estates, and Trusts
IN-114 Instructions 2020 Individual Income Estimated Tax Payment Voucher
IN-152 Calculator Underpayment of 2019 Estimated Individual Income Tax
IN-152A Calculator Annualized Income Installment Method for Underpayment of 2019 Estimated Tax by Individual, Estates, and Trusts
WH-435   Vermont Estimated Income Tax Payments for Nonresident Shareholders, Partners, or Members
Publications
No.   Title
GB-1135   myVTax Guide: How to Make an e-Payment on an Established myVTax Account
GB-1104   QuickStart Taxpayer Guide: ACH Credit Payments

Payment Due Dates

Quarterly

Tax Period Ending Due Date
3/31/2020 4/15/2020
6/30/2020 6/15/2020
9/30/2020 9/15/2020
12/31/2020 1/15/2021