Self-employed in Vermont: taxes and retirement for 2026

What consultants, freelancers, content creators, entrepreneurs, gig workers, tipped workers and tradespeople in Vermont need to know this year: Vermont income and estimated tax rules, and how to save for retirement without an employer plan.

Guides for Vermont

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Vermont rules that apply

State income tax (2026): Vermont has a graduated state income tax for 2026: 3.35% to 8.75%. Rates are percentages: 3.35%, 6.6%, 7.6% and 8.75% (32 V.S.A. 5822, https://legislature.vermont.gov/statutes/section/32/151/05822). Brackets are adjusted for inflation each year, and Vermont had not published 2026 rate schedules as of October 7, 2026. For 2025, the 8.75% rate started at $249,700 of taxable income for single filers. If AGI exceeds $150,000, tax is the greater of the rate-schedule amount or 3% of AGI (less U.S. obligation interest).
State estimated tax: Pay through withholding or estimates at least the lesser of 100% of last year's Vermont tax or 90% of this year's, or you face penalties and interest if you owe more than $500 when you file. Same dates as federal: April 15, June 15 and September 15, 2026, and January 15, 2027. Form IN-114.
Vermont business entity minimum tax: Partnerships, multi-member LLCs and S corporations active in Vermont file Form BI-471 and pay a $250 minimum annual entity tax. A single-member LLC that is disregarded federally and reports on Schedule C does not file BI-471. A one-owner business that elects S corporation status would owe the $250.
Minimum wage (2026): $14.42 an hour; tipped cash wage $7.21 an hour. $14.42 since January 1, 2026, for employers with 2 or more employees, adjusted every year by a set formula. The basic wage for service or tipped employees is $7.21: hotel, motel, tourist place or restaurant workers who regularly receive more than $120 a month in tips. The employer must make up any shortfall to $14.42.
ABC test for unemployment insurance (21 V.S.A. 1301(6)(B)): Paid work is presumed to be employment unless the business proves three things: the worker is free from control, the work is outside the business's usual course or places of business, and the worker is customarily engaged in an independently established trade or business.
State retirement program: VT Saves is live. It is built around W-2 employers and does not cover 1099 contractors through the employer mandate.

Questions

Do self-employed people in Vermont pay state income tax?

Vermont has a graduated state income tax for 2026: 3.35% to 8.75%. Rates are percentages: 3.35%, 6.6%, 7.6% and 8.75% (32 V.S.A. 5822, https://legislature.vermont.gov/statutes/section/32/151/05822). Brackets are adjusted for inflation each year, and Vermont had not published 2026 rate schedules as of October 7, 2026. For 2025, the 8.75% rate started at $249,700 of taxable income for single filers. If AGI exceeds $150,000, tax is the greater of the rate-schedule amount or 3% of AGI (less U.S. obligation interest).

When are Vermont estimated tax payments due for 2026?

Pay through withholding or estimates at least the lesser of 100% of last year's Vermont tax or 90% of this year's, or you face penalties and interest if you owe more than $500 when you file. Same dates as federal: April 15, June 15 and September 15, 2026, and January 15, 2027. The state form is IN-114.

Are there other Vermont taxes for self-employed self-employed people?

Vermont business entity minimum tax: Partnerships, multi-member LLCs and S corporations active in Vermont file Form BI-471 and pay a $250 minimum annual entity tax. A single-member LLC that is disregarded federally and reports on Schedule C does not file BI-471. A one-owner business that elects S corporation status would owe the $250.

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Sources

Facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.