Does Vermont Tax Social Security?
Vermont fully exempts Social Security for AGI at or below $55,000 (single) / $70,000 (married filing jointly) — limits raised for tax year 2024 — with a partial exemption phasing out over the next $10,000 of income.
Vermont is one of only 8 states that tax Social Security benefits in 2026.
State Tax Rate
3.35%–8.75%
Who's Exempt
Exempt below $55K single / $70K joint AGI
Who is exempt from Vermont's Social Security tax?
Available Exemptions & Deductions
- Full exemption when AGI is $55,000 or less (single/head of household/married filing separately/widowed) or $70,000 or less (married filing jointly).
- Partial exemption phases out linearly over the next $10,000 of AGI (fully phased out at $65,000 single / $80,000 joint).
Key facts about Vermont and Social Security
Vermont income tax rates range from 3.35% to 8.75% — the highest top rate among the taxing states.
Vermont ($55,000 single) and Utah ($54,000 single) have the lowest income limits among the eight taxing states, so more middle-income retirees are exposed here.
Above the phase-out, the federally taxable portion (up to 85%) is taxed at ordinary Vermont rates.
Tax-smart strategy for Vermont residents
Vermont’s low thresholds and steep top rate make it the state where the claiming decision and state taxes interact hardest. Delaying benefits while drawing down pre-tax accounts in lower-income years can keep more of the benefit under the exemption once it starts.
Frequently Asked Questions
About Vermont Social Security tax
The other states that tax Social Security in 2026
Get Your Personalized Vermont Analysis
Our engine factors in Vermont's exemptions and thresholds to show your true after-tax Social Security benefit.