When Do I 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
- If you are a resident of another state working in Vermont and no Vermont tax is being withheld from your earnings
How Much Should I Pay?
You can use your prior years’ tax liability or the worksheet included with Form IN-114, Individual Income Estimated Tax Payment Voucher to estimate your tax liability.
In order to avoid an underpayment of your estimated tax, which may result in penalty and interest charges, your estimated tax payments must either be:
- equal to 100% of last year’s tax liability or
- 90% of this year’s tax liability.
Note: For tax year 2018, the Department will waive penalties and interest for underpayment of estimated tax if your estimated tax payments are either equal to 100% of last year’s tax liability or 85% 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, Annualized Income Installment Method for Underpayment of 2017 Estimated Individual Income Tax and
- Vermont Worksheet IN-152A, Annualized Income Installment Method for Underpayment of 2017 Estimated Individual Income Tax
Paying Your Estimated Tax
You may pay your estimated tax in one of two ways:
- Pay online —You can use our online site to make your payment by ACH Debit (NO FEE). 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.
- Pay by 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.
Do you have estimated payments being made on your behalf by a business entity?