Vermont Estate Tax Guide

Q: Does Vermont have an inheritance tax?

No. Vermont levies a state estate tax (paid by the estate), not an inheritance tax.

Q: What is the Vermont estate tax exemption and rate?

$5,000,000 threshold; 16% rate above that amount with apportionment for nonresidents’ Vermont-situs property.

Q: When is the return due and can I extend?

Vermont estate tax return is due 9 months after death; an extension to file up to 6 months is available (tax due at 9 months).

Q: How do Vermont’s situs rules work for nonresidents?

VT taxes VT-situs real estate and tangibles; most intangibles follow domicile and are generally not VT-situs for nonresidents.

Vermont Estate Tax Guide (2025) — Rules, Threshold, Apportionment, Forms & Deadlines

Last updated: 6 Nov 2025

Vermont Estate Tax & Probate — Complete Guide

What executors and families need to know about Vermont probate and estate tax: revenue context, court process, who is taxed, what’s taxed, filing thresholds, situs rules, GST, forms, deadlines, and planning considerations.

Get help: Vermont Estate Tax Service (fixed-fee)

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Quick Primer (official): A Primer on the Vermont Estate Tax (Joint Fiscal Office, PDF). Concise background on why and how Vermont’s estate tax works; helpful context alongside the Department of Taxes forms & instructions.

Why this matters. Vermont’s estate tax has been a meaningful revenue source in recent years. Watch thresholds, the apportionment fraction for nonresidents, and coordination with federal GST.

Vermont Inheritance & Probate Basics

Intestacy & probate courts

Probate matters are handled by the Probate Division of the Vermont Superior Court. If there is no will, distribution follows Vermont’s intestate succession rules (Title 14, ch. 42).

How Vermont probate works

Typical steps: file petition, appoint executor/administrator, notice to interested parties/creditors, inventory, pay debts & taxes, interim/final accountings, decree of distribution, close estate. Vermont provides streamlined options for certain small estates.

Vermont Estate Tax — At a Glance

Who is taxed?

Vermont imposes a state estate tax on estates of decedents who were Vermont residents, and on nonresidents to the extent of Vermont-situs property. See 32 V.S.A. § 7442a and definitions in § 7402.

Tax base

The “Vermont taxable estate” starts from the federal taxable estate (whether or not a federal return is required), with additions such as state/foreign death taxes deducted federally and taxable gifts made within two years of death. See 32 V.S.A. § 7402(14).

Rate & threshold

Flat 16% on the portion of the Vermont taxable estate over $5,000,000 (no tax below that amount). See 32 V.S.A. § 7442a(b).

Apportionment

Computed tax is multiplied by a fraction: Vermont-situs property (plus certain VT-situs gifts within two years) over the federal gross estate (plus those gifts). See 32 V.S.A. § 7442a(b).

Situs rules

Real property is sited where located; tangible personal property where normally kept; most intangibles by the decedent’s domicile; special rule for certain artwork on loan. See 32 V.S.A. § 7402(15).

Due date

Vermont estate tax return due 9 months after death; up to a 6-month filing extension is available (payment still due by 9 months). See 32 V.S.A. §§ 7446–7447.

Who must file?

The executor must file if the decedent had Vermont-situs property and either a federal Form 706 is required or the gross estate plus certain gifts in the two years before death exceed $2,750,000. See 32 V.S.A. § 7444(a).

Need a fast estimate? Try the Vermont Estate Tax Calculator.

Official Pages, Forms & Where to File

Vermont Dept. of Taxes — Estate Tax overview & instructions (guidance, addresses, payment).
Statutes: Vermont Estate & Gift Tax (Title 32, Chapter 190) — full text online (incl. §§ 7402, 7442a, 7444–7447, 7460).
Primer: A Primer on the Vermont Estate Tax (PDF).
Vermont return: VT Form EST-191 (Estate Tax Return) — check the Dept. of Taxes site or form libraries (e.g., EST-191).
Federal: IRS Form 706 & instructions — IRS page.

Generation-Skipping Transfer (GST) Tax — Vermont § 7460

Vermont imposes a GST tax on transfers that are subject to the federal GST tax when the original transferor was a Vermont resident or when the property (real/tangible) is located in Vermont. Filing generally tracks the federal GST return and timing. See 32 V.S.A. § 7460.

Vermont Situs vs. Non-Situs Property (for Nonresidents)

Asset type	Vermont treatment	Reference
Real property in Vermont	Included in Vermont gross estate	32 V.S.A. § 7402(15)
Tangible personal property normally kept in VT	Included	32 V.S.A. § 7402(15)
Qualified work of art on loan to VT § 501(c)(3)	Treated as outside Vermont	32 V.S.A. § 7402(15)
Intangibles (e.g., stock, bank accounts)	Generally by domicile; for nonresidents typically not VT-situs	32 V.S.A. § 7402(15)

Nonresidents with Vermont real estate or tangible property may owe Vermont estate tax even if most assets are outside VT; the apportionment fraction limits tax to VT-situs property (32 V.S.A. § 7442a).

Filing Mechanics & Deadlines

When to file: 9 months from date of death; extension to file up to 6 months (tax due at 9 months). See 32 V.S.A. §§ 7446–7447.
Who files: The executor/administrator (“personal representative”) files the Vermont estate tax return and provides a copy of the federal return (or a pro-forma 706 if Vermont requires one). See 32 V.S.A. §§ 7444–7445.
Where to file & pay: Vermont Department of Taxes — see the Estate Tax page for addresses and payment methods.

Planning Ideas to Reduce Vermont Estate Tax

Marital & charitable transfers. Use federal deductions to reduce the Vermont-taxable starting point (state base links to federal taxable estate).
Lifetime giving timing. Consider gifts more than two years before death (Vermont adds back taxable gifts within two years). See 32 V.S.A. § 7402(14).
Entity & situs planning for nonresidents. Evaluate whether exposure from Vermont tangibles/real estate can be managed, balancing federal and income-tax issues.
Farms & closely held businesses. If federal § 6166 installment payment applies, Vermont provides a proportional reduction. See 32 V.S.A. § 7443.
Liquidity planning. Coordinate life insurance ownership/beneficiaries to manage probate delays and cash needs.
Trust design & GST. Align multigenerational transfers with federal GST and Vermont § 7460 filing rules.

For step-by-step implementation, see the dedicated Vermont Estate Tax Planning page or book a fixed-fee planning consult.

Case Law & Examples

Key Vermont rulings shape what’s included in the tax base, how estate tax is apportioned, and when tax determinations become final in probate. Browse concise summaries on the Vermont Estate Tax Cases page.

Major Recent Changes to Vermont’s Estate Tax

Vermont enacted a significant update in 2019 (effective 2020–2021), raising the exemption from $2,750,000 to $4,250,000 (Jan 1, 2020) and then to $5,000,000 (Jan 1, 2021), with a flat 16% rate on the portion above the exemption. The law retained Vermont’s two-year taxable gift add-back and the apportionment fraction that limits tax for nonresidents to Vermont-situs assets. The filing trigger continues to be either a required federal Form 706 or a combined federal gross estate plus certain gifts in the two years before death over $2,750,000. Subsequent updates have been primarily technical “conformity” changes aligning references to federal law, without altering the Vermont exemption or rate.

FAQs

Does Vermont have an inheritance tax?

No. Vermont has a state estate tax (paid by the estate), not an inheritance tax. See Title 32, Chapter 190.

What is the Vermont estate tax exemption and rate?

$5,000,000 threshold; 16% flat rate above that amount, with apportionment for nonresidents’ Vermont-situs property (32 V.S.A. § 7442a(b)).

When is the return due and can I extend?

Due 9 months after death; extension to file up to 6 months; tax is due at 9 months (32 V.S.A. §§ 7446–7447). Federal Form 706 follows the same 9-month rule.

How do Vermont’s situs rules work for nonresidents?

Vermont taxes Vermont-situs real estate and tangibles; most intangibles follow domicile and are generally not VT-situs for nonresidents (32 V.S.A. § 7402(15); apportionment per § 7442a).

Is there a Vermont GST tax?

Yes. Vermont imposes a GST on transfers subject to the federal GST when the transferor is a Vermont resident or the property is in Vermont; filing mirrors the federal return (32 V.S.A. § 7460).

Can you help me file or plan with a fixed fee?

Yes. See our Vermont Estate Tax Service packages for planning (residents & nonresidents) and filing, with transparent flat-fee ranges.

Need help filing or planning?

We assist with Vermont probate coordination, federal Form 706, and the Vermont return (EST-191), including situs analysis and GST compliance.

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