TAXES 17-13, Vermont State Income Tax Withholding

Published: March 17, 2017
Effective: Pay Period 06, 2017

Summary

The Single and Married income tax withholdings will increase for the State of Vermont as a result of changes to the formula for tax year 2017. 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
Basis for Withholding:	Federal or State Exemptions
Acceptable Exemption Data:	S/M, Number of Exemptions
TSP Deferred:	Yes
Special Coding:	None
Additional Information:	If a State income tax certificate has not been processed or if a valid State exemption code is not present, the Federal exemptions will be used in the computation of State tax. If the Federal exemptions are used and the employee has elected to have additional Federal taxes withheld, then additional State withholdings will be withheld at 27 percent of the additional Federal tax withheld and added to the State tax withholdings.

Withholding Formula (Effective Pay Period 06, 2017)

Subtract the nontaxable biweekly Thrift Savings Plan contribution from the gross biweekly wages.
Subtract the nontaxable biweekly Federal 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 (i.e., taxable life insurance) to the amount computed in step 2 to obtain the adjusted gross biweekly wages.
Multiply the adjusted gross biweekly wages times 26 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:
Exemption Allowance = $4,050 x Number of Exemptions

Apply the taxable income computed in step 5 to the following table(s) 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 Vermont Tax Withholding Should Be:
Over $0 but not over $2,650	$0.00
Over $2,650 but not over $40,250	$0.00 plus 3.55% of excess over $2,650
Over $40,250 but not over $94,200	$1,334.80 plus 6.80% of excess over $40,250
Over $94,200 but not over $193,950	$5,003.40 plus 7.80% of excess over $94,200
Over $193,950 but not over $419,000	$12,783.90 plus 8.80% of excess over $193,950
Over $419,000	$32,588.30 plus 8.95% of excess over $419,000

Married Tax Withholding Table

If the Amount of Taxable Income Is:	The Amount of Vermont Tax Withholding Should Be:
Over $0 but not over $8,000	$0.00
Over $8,000 but not over $70,500	$0.00 plus 3.55% of excess over $8,000
Over $70,500 but not over $161,750	$2,218.75 plus 6.80% of excess over $70,500
Over $161,750 but not over $242,000	$8,423.75 plus 7.80% of excess over $161,750
Over $242,000 but not over $425,350	$14,683.25 plus 8.80% of excess over $242,000
Over $425,350	$30,818.05 plus 8.95% of excess over $425,350

Divide the annual tax withholding calculated in step 6 by 26 to obtain the biweekly Vermont tax withholding. If Federal exemptions were used and there are additional Federal withholdings, proceed to step 8.
If Federal exemptions were used and additional Federal tax was withheld, multiply the additional amount by 27 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) homepage. Select the Publications tab in the center ribbon. Select U.S. Income Tax Formulas from the Publication menu to launch the tax map. Select the desired State from the map provided for the formula.

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