Live in New York, Work Remotely for a Vermont Employer: Who Taxes You?
Answer
Only New York taxes you. Vermont levies no personal income tax on wages, so nothing is withheld there and you file no Vermont return. New York taxes its residents on all income wherever earned, which means your Vermont earnings go on a New York resident return in full.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Vermont takes nothing, but New York still taxes residents on income earned anywhere, so the full amount lands on your New York return.
What you file
- 1Resident return · New York
File a New York resident return reporting all of your income.
The two states, side by side
| New York | Vermont | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form IT-203 | Form IN-111 with Schedule IN-113 |
| Credit for other-state tax | Form IT-112-R | Schedule IN-117 |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | New York State Department of Taxation and Finance | Vermont Department of Taxes |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Vermont and working in New York gives:Convenience-of-the-employer rule — both states tax you.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: New York → VermontBoth states — credit offsets the double tax
- 1099 contractor: New York → VermontHome state, plus the client state if you work there
- Moved mid-year: New York → VermontTwo part-year returns
Other New York pairs
Questions people actually ask
I live in New York and work remotely for a Vermont employer. Which state do I pay?
Only New York taxes you. Vermont levies no personal income tax on wages, so nothing is withheld there and you file no Vermont return. New York taxes its residents on all income wherever earned, which means your Vermont earnings go on a New York resident return in full.
Which state should my employer be withholding for?
New York. Your employer should withhold New York tax rather than Vermont tax on these wages. If a Vermont line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Vermont employer's location alone create a Vermont tax obligation?
No. Vermont sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Vermont are a different matter — those are Vermont-source income and can require a nonresident return.
How current is this?
The New York and Vermont rules on this page were last checked against New York State Department of Taxation and Finance and Vermont Department of Taxes on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- New York State Department of Taxation and Finance — individual income taxaccessed 2026-08-07
- Vermont Department of Taxes — individual income taxaccessed 2026-08-07