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Savings, CDs and tax

Vermont After-Tax Yield Calculator

What a savings account or CD keeps after Vermont's income tax (3.35% to 8.75% in 2026) and federal tax, and whether a Treasury bill, which Vermont can't tax, keeps more.

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Savings keeps, after tax3.21%The answer

Savings keeps, after tax

3.21%

In Vermont, a 4.5% APY keeps 3.21% after 22% federal and 6.6% state tax. A 4% Treasury bill, which Vermont can't tax, keeps 3.12%, so the savings account keeps 0.09% more.

Treasury bill keeps, after tax
3.12%
Better after tax
Savings or CD
Treasury yield that matches the APY
4.12%

Vermont income tax brackets, 2026 (taxable income)

RateSingle filersMarried filing jointly
3.35%$0 to $49,400$0 to $82,500
6.60%$49,400 to $119,700$82,500 to $199,450
7.60%$119,700 to $249,700$199,450 to $304,000
8.75%Over $249,700Over $304,000

What a 4.50% APY keeps in Vermont, by state bracket (22% federal bracket)

Vermont rateSavings or CD keepsT-bill yield that matches it
3.35%3.36%4.31%
6.60%3.21%4.12%
7.60%3.17%4.06%
8.75%3.12%4.00%

How this calculator works

Bank interest (savings, money market and CDs) is ordinary income to Vermont and to the IRS. After-tax yield = APY × (1 − federal rate − Vermont rate − local rate).

Treasury bills, notes and bonds are taxed only federally: federal law bars states from taxing their interest (31 U.S.C. 3124). After-tax yield = T-bill yield × (1 − federal rate).

The Vermont rates are its 2026 brackets as compiled by the Tax Foundation from state law. Choose the bracket your taxable income falls in; the calculator starts at the rate for a single filer with $75,000 of taxable income (6.60%).

Questions people ask

Does Vermont tax interest from savings accounts and CDs?

Yes. Vermont taxes bank interest as ordinary income at 3.35% to 8.75% in 2026, on top of federal income tax.

Are Treasury bills taxable in Vermont?

No. Interest on Treasury bills, notes, bonds and US savings bonds is exempt from Vermont income tax by federal law. It is still taxed federally.

Is a T-bill or a CD better in Vermont?

At Vermont's 6.60% rate and a 22% federal bracket, a 4.50% CD keeps 3.21%, the same as a T-bill yielding 4.12%. A T-bill paying more than that keeps more.

Do Treasury money market funds avoid Vermont tax?

Most states let you exclude the share of a fund's dividends that came from Treasury interest. Check Vermont's income tax instructions for the rule and the percentage your fund reports.

Other states

Terms explained

Related calculators

Sources

Updated by the RateHerald team. The maths is tested against worked examples; report a problem.