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Vermont Retirement Income Tax Calculator

Vermont exempts Social Security to $55,000 single / $70,000 joint AGI, phased out by $65,000 / $80,000.

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Vermont resident retirement worksheet

Use the year income is received, not the filing year. Later years use a separately approved assessment until the next return rules are verified.

Full-year Vermont resident with distinct qualified benefits and exactly one permitted retirement exemption election. Current-year deductions, exemptions and taxable-income brackets approved from the return, not payroll wage tables. Special capital-gain treatment remains separate. The displayed estimate includes the statutory minimum after qualifying U.S. obligation interest and the 24% addition on approved covered federal special taxes.

Prepare actual resident filing status and ownership. A selector change does not split joint dollars or approve a deduction.

Federally included receipts after contribution basis and all other income; this is not gross retirement cash or federal taxable income.

Current conformity and other additions, prepared independently. Zero is a confirmed amount.

Exclude every retirement subtraction calculated here. Basis differences and protected railroad benefits require approval; no duplicate deduction.

Actual year, filing category and deduction eligibility. This illustration is an entered amount, not an automatic standard deduction.

Separate from withholding, estimated payments and refundable credits. Blank leaves after-credit tax unresolved.

Used only when the Social Security exemption is elected.

Approved government contributory plan based on earnings not covered by Social Security. Ordinary IRA / private pension is not automatically eligible; one combined 10000 ceiling.

Military election has its own 125000–175000 federal-AGI phaseout; it cannot stack with Social Security or contributory pension exemptions.

Current statute uses 55000 single /70000 joint full exemption, then 10000 AGI phaseout. The older agency page’s 50000/65000 thresholds are superseded; surviving / head / separate use single test.

Prepared federal additional retirement-plan / tax-favored account tax, covered recapture and qualified lump-sum pension tax. Zero requires confirmation. Farm averaging and other special adjustments are outside this ordinary retirement case.

Qualifying interest from U.S. obligations already included in federal AGI and in the other-subtractions input. This is a subset, not a second ordinary deduction. Vermont’s 3% minimum base excludes this interest, not all tax-exempt or state-subtracted income. Enter an actual approved zero when none.

VT · 2026 scoped worksheet

Waiting on a figure

VT displayed annual tax estimate —
VT modeled taxable income
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Calculated retirement subtractions
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Included benefits subtracted
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Qualified pension / IRA subtraction
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Separate senior / disability subtraction
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Modeled retirement / exemption credits
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Estimate after other approved credits
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Calculation scopeFull-year Vermont resident with distinct qualified benefits and exactly one permitted retirement exemption election. Current-year deductions, exemptions, conformity modifications and federal special taxes approved. No farm averaging, capital-gain special rates or mixed residency.

Illustrative defaults. Enter approved taxable amounts and confirm eligibility. The result covers the displayed worksheet conditions; a complete return may require other income, adjustments, deductions or credits.

2026 JFO taxable-income charts with literal published bases, current enacted $55,000 / $70,000 benefit and pension phaseouts, one election, military $125,000–$175,000 phaseout, 3% minimum base after qualifying U.S. obligation interest above $150,000 and Vermont 24% federal special-tax addition. Approved deductions and credits separate. Independently reviewed October 2, 2026. Withholding tables are not used as final-return brackets. Illustrative deductions are entered amounts. Phase fractions use the continuing published 2025 booklet instruction to round to two decimals before multiplication; this is not a claim that final 2026 instructions are published. The federal-AGI trigger is strictly above $150,000; the minimum base excludes approved U.S. obligation interest. JFO prints the joint top base $18,915; a preliminary agency estimate chart prints $18,916. This worksheet identifies the JFO chart method rather than claiming final-return agreement.

Reviewed October 2, 2026. Vermont 2026: enacted exemptions and actual taxable-income charts

What Vermont taxes in retirement

Partly taxed: limits by age, plan, owner or income apply. Military retirement is covered in the guide. How these labels work.

Vermont 2026: enacted exemptions and actual taxable-income charts

Use Vermont’s actual 2026 tax charts, enacted benefit/pension phaseouts, one retirement exemption election and the high-income minimum.

Current enacted Vermont law gives full Social Security relief at federal AGI $55,000 or below for single, separate, head and surviving filers, $70,000 or below for joint filers. The next $10,000 income range reduces the eligible share linearly; at $65,000 or $80,000 respectively it is zero. Older agency summaries still display $50,000/$65,000 lower limits. This worksheet uses the current statutory thresholds, not that older summary.

A qualifying contributory pension from earnings not covered by Social Security can use the same income phaseout, but its combined eligible exemption is capped at $10,000. Ordinary private pension/IRA income does not establish that category. Military retirement and qualifying survivor income have a separate full-exemption boundary at $125,000 and a phaseout ending at $175,000. Vermont permits one of these exemption elections; do not stack the Social Security, contributory-pension and military subtractions.

The Vermont Joint Fiscal Office’s 2026 Fiscal Facts, p 50, publishes taxable-income charts rather than withholding wages. Joint/surviving thresholds are $84,700, $204,750 and $312,050; single thresholds are $50,750, $122,850 and $256,300. Separate and head categories have their own chart. The worksheet retains each literal rounded base from that publication. A payroll table or 2025 return table is not relabeled as a 2026 return chart.

The current statute requires tax to be at least 3% of federal AGI when that AGI exceeds $150,000. That floor can matter even after large lawful state deductions. Covered federal additional retirement-plan/tax-favored-account taxes, investment recapture and qualified lump-sum pension taxes add 24% under the separate provision. Approved deductions, exemptions, federal conformity modifications and nonrefundable credits remain their own prepared amounts; farm averaging and preferential capital-gain cases need a separate calculation.

For the displayed joint example, federal AGI $80,000 is at the benefit-exemption zero endpoint. An entered $10,000 deduction leaves $70,000 taxable, wholly in the 3.35% bracket, producing $2,345 before other credits. At joint AGI $75,000, the eligible Social Security share is 50%; $20,000 included benefits create $10,000 subtraction, while electing an eligible $15,000 contributory pension would produce only $5,000 subtraction. The comparison depends on actual payment eligibility, and one spouse’s plan cannot be relabeled as the other’s military benefit.

For an income-tested retirement exemption, the continuing published 2025 worksheet rounds the phase fraction to two decimal places before multiplying the eligible receipts. For example, a joint filer with AGI $75,190 has a fraction of 0.481 rounded to 0.48, so $20,000 of included Social Security produces a $9,600 subtraction. The same fraction rounding applies to the separate military phaseout. The source year and the 2026 estimate-chart method remain explicit while final 2026 return instructions are pending.

Prepare these Vermont records

Official Vermont source. JFO 2026 Fiscal Facts, p 50; current 32 VSA 5830e and 5822; agency 2026 legislation/conformity guidance.

Calculate the federal portion separately

Use the federal retirement-tax worksheet to prepare federally included benefits and ordinary income. Its federal deduction and rates do not replace the Vermont rules above.

Compare Vermont with nearby states

New Hampshire, Massachusetts and New York border Vermont. Run each one’s worksheet with the same household figures before deciding where a move would leave you.

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Updated / verified · Retirement Income Tax Calculator Editorial Team