TIN ComplianceA resource from TIN Comply
Backup withholding
Yes, 30% of federal
Nonresident payments
No
Forms
WHT-436, WHT-434, BR-400
State withholding

Vermont backup withholding and nonresident contractor withholding

Vermont’s duty is statutory and its rate is administrative. 32 V.S.A. 5841(a) requires every person who must withhold federal income tax from a payment that is also subject to Vermont tax to withhold the amount the Commissioner prescribes, and the same subsection exempts banks from withholding on payments subject to federal backup withholding, which confirms that the rule reaches everyone else. The Department’s GB-1210 says Vermont withholding on non-periodic payments can be estimated at 30 percent of the federal withholding; at the 24 percent federal backup rate that is 7.2 percent of the payment. Vermont has no separate nonresident contractor rule. Withholding is reported on Form WHT-436 quarterly and Form WHT-434 by January 31.

State backup withholding requiredNonresident non-wage withholding not requiredSources checked November 1, 2026Updated November 1, 2026
In this guide
  1. Status
  2. State backup withholding
  3. What Vermont does not require
  4. Pass-through entity withholding
  5. From the source
  6. What to confirm
  7. Sources

Status

State backup withholdingRequired

Primary source (statute, regulation or agency publication saved in full); statute; rate is Commissioner guidance for non-periodic payments, not an express backup-withholding rate

Non-wage payments to nonresidentsNot required

Primary source (statute, regulation or agency publication saved in full)

Federal backup withholding under IRC 3406 (24 percent on a missing or mismatched TIN) applies in Vermont exactly as everywhere else; this page covers only what the state adds. The 50-state tables put Vermont next to its neighbours, and the Vermont 1099 filing page covers whether the state wants its own copy of the 1099.

State backup withholding

Trigger
32 V.S.A. 5841(a): every person required under federal law to withhold federal income tax from payments that are also subject to Vermont income tax must withhold Vermont tax in the amount the Commissioner prescribes. Federal backup withholding is a federal withholding requirement, so it triggers Vermont withholding; the statute expressly exempts banks from withholding on payments subject to federal backup withholding, confirming the rule otherwise applies.
Rate
Not stated as a separate backup rate. Commissioner's guidance (GB-1210) says Vermont withholding on non-periodic payments “can be estimated at 30% of the federal withholding” (30% of the 24% federal backup rate = 7.2% effective). Nonqualified deferred compensation payments: 6% by statute.
Statute
32 V.S.A. 5841(a); 32 V.S.A. 5841-5844; Vermont GB-1210 (Income Tax Withholding Instructions, Tables, and Charts)
Withholding return and forms
Form WHT-436 quarterly reconciliation; Form WHT-434 annual withholding reconciliation (transmittal for W-2/1099); myVTax filing; Form BR-400 registration
Deposit schedule
Semiweekly, monthly or quarterly as assigned by the Department; all filers file WHT-436 quarterly
Annual reconciliation
Form WHT-434 due the last day of January; electronic filing required for 10 or more W-2/1099 forms
Payee statement
Federal Form 1099 showing Vermont withholding, filed with WHT-434 (Vermont does not participate in the Combined Federal/State 1099 program)
Exemptions
Banks as defined in 8 V.S.A. 909a(a) are not required to withhold on payments subject to federal backup withholding; payments not subject to Vermont income tax

What Vermont does not require

Withholding on non-wage payments to nonresidents

No withholding on non-wage payments to nonresidents: No separate Vermont rule for nonresident contractors or entertainers. GB-1210 states payments are subject to Vermont withholding only if subject to federal withholding and made to a Vermont resident or to a nonresident for services performed in Vermont.

Basis: Primary source (statute, regulation or agency publication saved in full).

Pass-through entity withholding (out of scope)

Vermont requires withholding/estimated payments by pass-through entities for nonresident owners (Form WH-435). Entity-level withholding on distributions to nonresident owners is a duty of the entity, not of a payer, and is not covered on this page.

From the source

“shall not be required to withhold Vermont income tax from payments that are subject to federal back-up withholding”

32 V.S.A. 5841(a), read November 1, 2026

“the Vermont withholding can be estimated at 30% of the federal withholding”

Vermont Department of Taxes, GB-1210 (2026), read November 1, 2026

What to confirm

  • The statute sets the duty but leaves the amount to the Commissioner. The only published figure is the GB-1210 guidance for non-periodic payments (30 percent of the federal withholding), which is not labelled as a backup withholding rate. Confirm the rate with the Department of Taxes before withholding a single figure.

Sources

Each source below was read and saved on November 1, 2026; the page is built from the saved text. Statutes are cited to the section; department pages and publications to their title and, where shown, revision date.

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