Bill H.621 proposes the establishment of two new personal income tax brackets in Vermont, amending the existing tax structure for individuals, estates, and trusts. The bill modifies the income thresholds and tax rates for various filing categories, including married individuals, heads of households, unmarried individuals, and married individuals filing separately. Notable changes include increasing the income thresholds for the lower tax rates, with the maximum taxable income for the highest bracket raised to $1,000,000. Additionally, the bill introduces new tax rates for income over $500,000 and $1,000,000, with corresponding adjustments to the tax amounts owed at each level.

The bill also stipulates that the taxable income amounts will be adjusted annually for inflation starting in 2026, using the Consumer Price Index. Furthermore, it includes a retroactive effective date of January 1, 2026, for the new tax brackets, ensuring that the changes apply to taxable years beginning on or after that date. This legislation aims to update Vermont's income tax system to better reflect current economic conditions and provide a more equitable tax structure.

Statutes affected:
As Introduced: 32-5822