How Vermont capital gains tax works
Vermont does not have a separate capital gains rate. Gains are taxed as ordinary income, stacking on top of your other earnings.
Because of that stacking, a large gain can push part of your income into a higher bracket, so the rate on the gain depends on your total income for the year.
Vermont allows a partial exclusion for certain long-term capital gains.
Short-term vs long-term gains
Federally, assets held longer than a year qualify for lower long-term rates. Most states, including Vermont, do not offer a separate long-term rate.
This calculator estimates the VT state tax by adding the gain to your other income and measuring the extra tax — your true marginal cost.
Lowering the bill
Holding assets longer, harvesting losses to offset gains, and spreading sales across tax years can all reduce what you owe.
Remember this shows Vermont state tax only; federal capital gains tax applies on top. Verify with the Vermont Department of Taxes (tax.vermont.gov).
Frequently asked questions
Does Vermont tax capital gains?
Yes — Vermont taxes capital gains as ordinary income, so the rate depends on your total income.
What is the capital gains tax rate in Vermont?
Gains are taxed at your Vermont income tax rate, up to 8.75%, since there is no separate capital gains rate.
Are long-term gains taxed lower in Vermont?
Vermont allows a partial exclusion for certain long-term capital gains.
Does this include federal capital gains tax?
No. This estimates the VT state tax only. Federal capital gains tax is separate and applies on top.