Withholding on Social Security and Other Federal Benefits

The Social Security Administration does not withhold state tax from Social Security benefits. However, if part or all of your benefits are taxable in Vermont, you may want to withhold more state tax from other sources of income.

To do this, you must complete Form W-4VT, Employee’s Withholding Allowance Certificate , and submit it to your employer. Learn more about calculating your Vermont Income Tax Withholding . Estimate the tax on your Social Security benefits and enter the additional amount you want to be withheld from your paycheck where it is requested on the form. An alternative is to pay the estimated tax on your Social Security benefits each quarter using Form IN-114, Individual Income Estimated Tax Payment Voucher .