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Live in Texas, Work in Vermont: Which State Taxes Your Paycheck?

Work state onlyVermont withholds

Answer

Vermont withholds, Texas does not. As a Texas resident you have no home-state income tax return at all, so the Vermont nonresident return is the whole of your state filing. Nothing offsets the Vermont tax, because a credit has to be claimed against a home-state tax that does not exist.

Last verified

This is the mirror image of the more common commute. There is no home-state return to file, so the Vermont nonresident return carries the whole obligation — and because Texas charges nothing, there is no credit mechanism involved anywhere.

What you file

  1. 1Nonresident return · VermontForm IN-111 with Schedule IN-113

    File a Vermont nonresident return for the wages you earned in Vermont. Texas has no wage income tax, so there is no second return and no credit to claim.

The two states, side by side

 TexasVermont
Taxes wagesNoYes — graduated
Reciprocity partnersNoneNone
Convenience ruleNoNo
Nonresident returnNot applicableForm IN-111 with Schedule IN-113
Credit for other-state taxNo income taxSchedule IN-117
Nonresident safe harbourNot applicableNone published
Local income taxNoNo
Revenue departmentTexas Comptroller of Public AccountsVermont Department of Taxes
Last verified

The other direction

Reversing the commute does not always reverse the answer. Living in Vermont and working in Texas gives:Home state only.

Vermont to Texas →

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.

Other Texas pairs

Questions people actually ask

I live in Texas and work in Vermont. Which state takes the tax out of my paycheck?

Vermont withholds, Texas does not. As a Texas resident you have no home-state income tax return at all, so the Vermont nonresident return is the whole of your state filing. Nothing offsets the Vermont tax, because a credit has to be claimed against a home-state tax that does not exist.

Which state should my employer be withholding for?

Vermont. The wages are sourced to Vermont, so Vermont withholding is correct and there is no Texas withholding to set up, because Texas levies no income tax on wages.

How current is this?

The Texas and Vermont rules on this page were last checked against Texas Comptroller of Public Accounts 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.