What are the recent government forms and tax changes for Vermont?

Upcoming Changes:

• Vermont State Withholding (VTSWH) - Effective January 1, 2026: The tax tables changed for all filing statuses. The exemption allowance changed to $5,400. Distributed in PTUS 26.02 Payroll Tax update on January 29, 2026.

Recent Changes:

• Vermont Child Care Employee Contribution tax rate setup (VTCCC) will be changed to a withholding tax type on Payroll Tax Update to be distributed on PTUS 25.01.
• Vermont Child Care Employer Contribution tax rate setup (VTCCC_E) will remain as an unemployment tax type and a formula will be added to this tax.  To be distributed on PTUS 25.01.
• NOTE:  If the employer is going to pay the employee's contribution rate of .11, remove the percentage on the VTCCC tax rate setup and select a zero formula on the formula field.  Increase the percent on the VTCCC_E tax from .33 to .44.
• Vermont State Withholding (VTSWH) - Effective January 1, 2025: The tax tables changed for all filing statuses. The exemption allowance changed to $5,300. Distributed in PTUS 25.02 Payroll Tax update on January 28, 2025.

• Vermont Child Care Employee Contribution tax rate setup (VTCCC) will be changed to a withholding tax type on Payroll Tax Update to be distributed on PTUS 25.01.
• Vermont Child Care Employer Contribution tax rate setup (VTCCC_E) will remain as an unemployment tax type and a formula will be added to this tax.  To be distributed on PTUS 25.01.

• Vermont Child Care Contribution ( VTCCC  and  VTCCC_E ) - Effective date July 1, 2024. This includes an Employee and Employer contribution . Distributed in PTUS 24.04.
  
  
  • The employee contribution rate is .11% (VTCCC).
  • The employer contribution rate is .33% (VTCCC_E).
  • You’ll need to add both taxes to the VT tax group. Taxes won’t calculate or process unless they are in a Tax group. 
  • See https://tax.vermont.gov/business/child-care-contribution for the State's instructions regarding these taxes.
  • Language on this state link for these taxes includes this section:

    What Employers Need to Know

    • Employers are required to pay a 0.44% payroll tax on all employee wages earned in Vermont.

    • An employer may choose to deduct and withhold a maximum of 25 percent of the required contribution (i.e., 0.11%) from employee wages.

    • Employers will be required to remit CCC payroll tax payments to the Department in the same manner and frequency as they remit Vermont Income Tax Withholding, with quarterly reporting on the WHT-436 Quarterly Withholding Reconciliation. Additional tax guidance and updated forms will be available on this page as they are finalized.

  • Because of the language in the state's first bullet point, both taxes were setup as Unemployment type taxes and not Withholding taxes.
  • After additional information the VTCCC should be setup as an Witholding tax type.  VTCCC_E will remain as an Unemployment tax type.  Employer paid taxes cannot be withholding tax types due to pretax Deductions or pretax Pays.  Withholding taxes are paid by an Employee.
  • We are aware that these taxes are being reported on the VT WHT-436 Quarterly report.  This is a Withholding, Childcare and Healthcare report.
  • In order to include these tax amounts on this quarterly report, link VTCCC in Aatrix to a specific Tax Description.  [VT- Child Care Contributions (Local-5995)]
  • Sample setup for VTCCC.  (Employer ID is an example only).
  • 
  • Linking this tax in this specific way will allow the amounts to populate to the VT WHT-436 quarterly report accurately.
  • This tax will appear in Box 14 of the W2.

NOTE:  If an employer elects to pay the employee portion of this tax, the VTCCC tax will still need to process a taxable and subject to amount to ensure the correct tax calculation will take place for the VTCCC_E Taxes.  Both the VTCCC and VTCCC_E taxes will need to be added to the VT State Tax Group.  A Zero formula will need to be placed on the VTCCC tax rate setup.

• Vermont State Withholding (VTSWH) - Effective January 1, 2024: The tax tables changed for all filing statuses. The exemption allowance changed to $5,100. Distributed in PTUS 24.02 Payroll Tax update on January 23, 2024.
• Vermont State Withholding (VTSWH) - Effective January 1, 2023: The tax tables changed for all filing statuses. The annual withholding allowance increased to $4,850.00. Distributed in the PTUS 23.02 Payroll Tax update.
• Vermont State Withholding (VTSWH) - Effective January 1, 2022: The tax tables changed for all filing statuses. The annual withholding allowance increased to $4,500.00. Distributed in the PTUS 22.02 Payroll Tax update on January 10, 2022.
• Vermont State Withholding (VTSWH) - Effective January 1, 2021: The tax tables changed for all filing statuses. The annual withholding allowance increased to $4,400.00. Distributed in the PTUS 21.02 Payroll Tax update on January 15, 2021.
• Vermont State Withholding (VTSWH) - Effective January 1, 2020: The tax tables changed for all filing statuses. The annual withholding allowance increased to $4,350.00. Distributed in the PTUS 20.02 Payroll Tax update on January 16, 2020.
• Important: The PTUS 20.01 tax update included additional filing statuses to accommodate the new federal filing statuses, but didn’t include the Vermont state tax withholding changes. For this reason the VTSWH tax id in Setup, Taxes, Tax Rates shows an effective date of January 1, 2020 after installing the PTUS 20.01 tax update. When a tax rate has an additional update or change, we increment the effective date by one day. The effective date that includes the 2020 Vermont state withholding changes will show January 2, 2020 once you've applied the PTUS 20.02 tax update.
• Vermont State Withholding (VTSWH) - Effective January 1, 2019: The tax tables changed for all filing statuses. The annual withholding allowance increased to $4,250.00. Distributed in PTUS 19.02 on January 23, 2019.