TAXES 21-10, Vermont State Income Tax Withholding

Published: February 25, 2021
Effective: Pay Period 04, 2021

Summary

The income tax withholding for the State of Vermont includes the following changes:

The annual amount per allowance has changed from $4,350 to $4,400.
The Single or Head of Household and Married income tax withholding tables have changed.

No action on the part of the employee or the personnel office is necessary.

Tax Formula

State Abbreviation:	VT
State Tax Withholding State Code:	50
Acceptable Exemption Form:	W-4VT or W-4 (see the Additional Information section)
Basis for Withholding:	Federal or State allowances (see the Additional Information section)
Acceptable Exemption Data:	S/M, Number of allowances
TSP Deferred:	Yes
Special Coding:	None
Additional Information:	Employees who have not previously submitted a W-4VT and have submitted a 2020 Federal Form W-4 or later, will default to Single and zero (S00). Employees who have not previously submitted a W-4VT and have not submitted a 2020 Federal Form W-4 or later, will default to the prior to 2020 Federal Form W-4 submission.

Withholding Formula (Effective Pay Period 04, 2021)

Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
Subtract the nontaxable biweekly Federal Employees Health Benefits Plan payment(s) (includes dental and vision insurance program and Flexible Spending Account — health care and dependent care deductions) from the amount computed in step 1.
Add the taxable biweekly fringe benefits (e.g., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages by the number of pay dates in the tax year to obtain the gross annual wages.
Determine the exemption allowance by applying the following guideline and subtract this amount from the annual wages to compute taxable income:
Multiply the number of Allowances by $4,400

Apply the taxable income calculated in step 5 to the following tables to determine the annual Vermont tax withholding:

Single or Head of Household Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
Over $0 but not over $3,175	$0.00
Over $3,175 but not over $44,125	3.35% of excess over $3,175
Over $44,125 but not over $102,375	$1,371.83 plus 6.60% of excess over $44,125
Over $102,375 but not over $210,125	$5,216.33 plus 7.60% of excess over $102,375
Over $210,125	$13,405.33 plus 8.75% of excess over $210,125

Married Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of Tax Withholding Should Be:
Over $0 but not over $9,525	$0.00
Over $9,525 but not over $77,925	3.35% of excess over $9,525
Over $77,925 but not over $174,875	$2,291.40 plus 6.60% of excess over $77,925
Over $174,875 but not over $261,475	$8,690.10 plus 7.60% of excess over $174,875
Over $261,475	$15,271.70 plus 8.75% of excess over $261,475

Divide the annual tax withholding calculated in step 6 by the number of pay dates in the tax year to obtain the biweekly Vermont tax withholding. If Federal allowances were used and there are additional Federal withholdings, proceed to step 8.
If Federal allowances were used and additional Federal tax was withheld, multiply the additional amount by 30 percent and add that to the result of step 7 to obtain the biweekly Vermont tax withholding.

Resources

To view the updated tax formula, go to the HR and Payroll Clients page from the MyNFC drop-down menu on the National Finance Center (NFC) Home page. Select the Publications tab and select U.S. Income Tax Formulas from the Publications menu to launch the tax map. Select the desired State from the map provided for the formula.

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