Selling stock, a business, or property in Vermont triggers tax at two levels — federal and state. This calculator combines the federal capital-gains rules (the preferential 0/15/20% long-term schedule plus the 3.8% Net Investment Income Tax) with Vermont’s distinctive treatment: gains are taxed as ordinary income, but qualifying long-term gains get a partial exclusion that meaningfully lowers the effective rate.
How it works
The tool computes three components and sums them:
- Federal tax. Long-term gains are stacked on top of your other taxable income and taxed at 0%, 15% or 20% depending on where they land. Short-term gains use your ordinary federal marginal rate. The NIIT adds 3.8% on investment income above $200,000 (single) or $250,000 (married filing jointly).
- Vermont exclusion. For long-term gains, Vermont excludes the greater of $5,000 or 40% of the gain from assets held more than three years, capped at 40% of taxable income.
- Vermont tax. The remaining taxable gain is stacked on your other income through Vermont’s brackets: 3.35% / 6.60% / 7.60% / 8.75% (2025).
Total tax on the gain = federal capital-gains tax + NIIT + Vermont tax after exclusion.
Example and notes
Suppose a single filer with $80,000 of other taxable income realizes a $20,000 long-term gain on an asset held more than three years. Vermont excludes the greater of $5,000 or 40% × $20,000 = $8,000, taxing only $12,000 at its graduated rate. Federally the gain falls largely in the 15% bracket. The calculator stacks both correctly so neither rate is over- or under-applied.
Because Vermont’s exclusion only applies to long-term gains held over three years, holding a qualifying asset past that mark can substantially cut your state tax. This is a planning estimate using 2025 Vermont brackets and 2024 federal thresholds — confirm specifics at tax.vermont.gov and irs.gov before relying on it for a return.