2025 Tax Year

Vermont Side Hustle Tax Calculator

Calculate your Vermont state tax (6.60%), federal tax, and self-employment tax on 1099 income.

VT6.60%

650,000 residents

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2025 rates

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Last updated: January 2026 · Data from IRS Rev Proc 2024-40

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State

W-2 Income (from your day job)

Side Hustle Income *

Business Expenses (optional)

Vermont side hustlers face progressive income tax rates from 3.35% to 8.75%. The Green Mountain State has one of the higher top rates in the nation, though this only applies to income over $229,550. Vermont has no local income taxes, and the state offers various credits for low-to-moderate income earners.

Vermont Tax Guide

How Side Hustle Taxes Work in Vermont

Vermont uses a four-bracket progressive system:

**Vermont state tax rates (2025):** - 3.35% on income up to $45,400 (single) - 6.6% on income $45,400-$110,050 - 7.6% on income $110,050-$229,550 - 8.75% on income over $229,550

**Key features:** - No local income taxes - Various income-based credits available - Higher rates than neighboring New Hampshire (0%)

Example

What Vermont Side Hustlers Owe

Let's say you're a single filer in Burlington with a $52,000 W-2 job and $15,000 in side hustle income from freelance graphic design, with $2,500 in business expenses.

**Your estimated taxes on the side hustle:** - Net self-employment income: $12,500 - Federal SE tax (15.3% of 92.35%): ~$1,768 - Federal income tax on side income: ~$2,750 (22% bracket) - Vermont state tax (6.6%): ~$825 - **Total additional tax: ~$5,343**

Important Dates

Vermont Tax Deadlines 2025

Vermont estimated tax deadlines: - **Q1**: April 15, 2025 - **Q2**: June 16, 2025 - **Q3**: September 15, 2025 - **Q4**: January 15, 2026

Use Vermont Form IN-114 for state estimated tax payments.

Save Money

Common Deductions for Vermont Freelancers

Vermont freelancers should maximize deductions given the state's higher progressive rates. **Home office expenses**: Claim dedicated business space using simplified ($5/sq ft) or actual expense method. **Business mileage**: 67 cents/mile for 2025; important for those serving clients in Burlington, Montpelier, or across the state. **Equipment and supplies**: Computers, cameras, tools, and office supplies are deductible. **Professional services**: Accounting, legal, and tax preparation fees are fully deductible. **Health insurance premiums**: Self-employed individuals can deduct 100% of health insurance costs. **Retirement contributions**: SEP-IRAs and Solo 401(k)s reduce federal AGI, which Vermont uses as its starting point—saving you at federal rate plus up to 8.75%. **Marketing expenses**: Website costs, business cards, and promotional materials are deductible. **Vermont EITC**: Vermont offers its own Earned Income Tax Credit for eligible low-to-moderate income workers. Vermont starts with federal AGI, so all Schedule C deductions reduce your VT taxes.

Common Questions

Vermont Side Hustle Tax FAQ

What is Vermont's tax rate on side hustles?

Most side hustlers pay Vermont's 6.6% rate (income $45,400-$110,050). The 8.75% rate only applies to income over $229,550.

Does Burlington have a city income tax?

No, Burlington and all Vermont cities do not have local income taxes. You only pay the state tax rate.

How does Vermont compare to New Hampshire?

Vermont has significantly higher taxes. New Hampshire has 0% income tax, while Vermont rates range from 3.35% to 8.75%. Many freelancers consider this when choosing where to live.

Do I need to register my side hustle in Vermont?

Sole proprietors using their legal name don't need state registration. If using a trade name (DBA), register with the Vermont Secretary of State. LLCs must register with the Secretary of State. Sellers may need a Sales Tax Certificate.

When are Vermont quarterly estimated taxes due?

Vermont follows federal quarterly deadlines: April 15, June 16, September 15, and January 15. Use Form IN-114 for payments.

Does Vermont offer any tax credits for freelancers?

Vermont offers an Earned Income Tax Credit (EITC) for eligible low-to-moderate income workers, worth up to 38% of the federal EITC. There are also credits for child care and education expenses that may benefit some side hustlers.

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