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Individual Income

Estimated Income Tax Payments

Click here for the 2014 IN-114 Estimated Payment Voucher


Who Must Make Payments
Estimated income tax payments apply to every individual (except farmers and fishermen as defined by the laws of the United States) when the income tax exceeds the withholding and tax credits. Estimated payments are generally necessary on income with no withholding or insufficient withholding. Making estimated payments is particularly important for residents working in another state or non-Vermont residents working in Vermont.

Amount of Estimated Payments
If the taxes withheld from your wages plus any allowable tax credits are less than your income tax, you must make estimated payments in four equal installments. Estimated payment (together with withholding and credits) must equal 100% of last year’s tax or 90% of this year’s tax, or you will be billed interest and penalty on the amount of underpayment for each quarter. NOTE: No interest or penalty will be assessed if your income tax from Line 26 of the Vermont income tax form, less withholding and credits, is less than $500 for the taxable year.

 Examples:

  • Your tax last year was $800. This year it is $1,000. You have no withholding, but make four timely estimated payments of $150 each. The total estimated payments ($600) and withholding ($0) do not equal either last year‘s tax or 90% of this year’s tax, and this year’s tax from Line 26 less withholding and credits is not less than $500. You owe interest and penalty on the underpayment.

  • Your tax last year was $800. This year it is $400. You had withholding of $100, but made no estimated payments. Your total withholding ($100) and estimated payments ($0) do not equal either last year’s tax or 90% of this year’s tax. However, your Line 26 tax less withholding and credits, is less than $500. No interest or penalty will be assessed.

  • Your tax last year was $800. This year it is $1,000. You have withholding of $400 and make four timely estimated payments of $100 each. Your total withholding and estimated payments equal $800 which is 100% of last year’s tax. No interest or penalty will be assessed.

  • Your tax last year was $800. This year it is $600. You had withholding of $110, but made no estimated payments. The total of your withholding and estimated payment ($110) does not equal either last year’s tax or 90% of this year’s tax. However, your tax on Line 26 less withholding and credits is less than $500. No interest or penalty will be assessed.

  • Your tax last year was $800. This year it is $1,000. You had withholding of $300, but made no estimated payments. You will owe interest and penalty on a $500 underpayment – the difference between last year’s tax and your withholding.

Taxpayer Information Line:
1.866.828.2865 (Toll-free in VT)
or 802.828.2865 (Local & Out-of-State)

 


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Vermont Department of Taxes, 133 State Street, Montpelier, Vermont 05633-1401