Vermont
Population: 647,064
Tax on retirement income: Yes
Cost of Living for Retirees: 16.40%
State income tax: 3.35% to 8.75%
Average property tax: 1.80% of market value
If you wish to move to Vermont for your retirement, you should be aware that the state will tap your income like it does one of its maple trees! This state taxes all retirement income at rates anywhere between 3.35% and 8.75%, including your Social Security benefits.
But, individuals who make an adjusted gross income of $45,000 or less, and joint-filing couples who earn $60,000 or less, qualify for full exemptions from the state Social Security tax. This state also charges a 16% estate tax on any property that surpasses $2.8 million.
And property taxes are pretty high, with the median tax on a $350,000 house coming to about $6,300.
The good news is that some retirees might qualify for Vermont’s Elderly and Permanently Disabled Tax Credit, which is worth 24% of the federal credit for aging adults and permanently disabled individuals.
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