Are Social Security benefits taxable in Vermont?

Yes, Social Security benefits are subject to taxation in Vermont. The state follows the federal taxability rules for Social Security benefits. This means that if your total income exceeds certain thresholds, a portion of your Social Security benefits might be taxable. The taxation amount depends on your combined income, which includes your adjusted gross income, nontaxable interest, and half of your Social Security benefits. If your combined income exceeds the thresholds specified by the IRS, a portion of your benefits may be subject to Vermont state income tax. It's important to note that not all recipients will owe taxes on their Social Security benefits. The Vermont Department of Taxes provides further details and resources to help individuals determine their tax obligations related to Social Security benefits.