Adjusting a Vermont Nonresident Employee Income Tax

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Vermont Nonresident Employee Tax Percentage

Background

If you are a Vermont employer, and have an employee who is a nonresident of Vermont working for you, you may need to enter a nonresident percent of state income tax to withhold, if they’re working in Vermont and another state in the same pay period.   By default, this field is blank, which will tax the employee’s entire pay at the same rates as Vermont residents.  If the Vermont nonresident employee has worked only partially in Vermont during their pay period, you will need to enter the percentage of hours that were worked in Vermont.

For example, if the Vermont nonresident employee only worked 30 out of 40 hours in Vermont (and the remaining 10 hours in another state), you would enter 75% in the Nonresident Percentage field.

For further information about Vermont Nonresident Taxes, see the State of Vermont Income Tax Withholding Instructions.

To add or change the nonresident tax percentage in Patriot Software

For new customers adding employees in the wizard, this field is on the employee’s Tax Information page.  For employees added after the wizard, go to:

  • Payroll > Employees > Employee List > Click the employee name > Taxes > Edit
  •  Under the State Withholding section, for the Nonresident Percentage, enter the percent of Vermont hours worked during the pay period.  You may need to change this percentage over time if the ratio fluctuates from pay to pay.  You should leave this field blank if this does not apply.  Do not enter 0, as it will result in zero tax withholding.
  • Click Save.

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