27 December 2017 Vermont to delay release of its 2018 income tax withholding tables The Vermont Department of Taxes announced that it will delay until late January 2018 its 2018 income tax withholding tables as it awaits the final passage of the federal Tax Cuts and Jobs Act (the tax reform bill). (VTax Connect, December 21, 2017.) Employers are instructed to use the 2017 income tax withholding tables until such time as the 2018 income tax withholding tables are available. Note that, except for non-periodic payments, employers no longer compute Vermont income tax withholding on regular wages as a percentage of federal income tax withholding. (See the exception for supplemental wages below.) The 2017 income tax rates are 3.55%, 6.80%, 7.80%, 8.80% and 8.95%. Vermont is the only state that uses a percentage of federal income tax withholding as an alternative to the regular withholding method for computing state income tax withholding on supplemental wages. For 2017, the supplemental income tax withholding rate is 24% of federal income tax withholding. This rate will continue to apply until the Department issues guidance for 2018. The IRS also announced this month that it will delay release of its 2018 federal income tax withholding tables and related guidance until January 2018, with employer implementation required sometime in February 2018. Vermont is one of many states that updates its income tax withholding tables each year. Several of these states have already released their 2018 income tax withholding tables. We will issue an update in the first week of January with a summary of all the states that have revised their income tax withholding tables for 2018 and those, like Vermont, that anticipate a delay in their 2018 update. Document ID: 2017-2211 |
