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New company registration in Vermont

Income tax withholding

Register with the Secretary of State online. During this process, you will also need to register for a Business Tax account to obtain your Withholding Account Number and filing frequency. Here are some helpful instructions and a link to the website: Vermont Department of Taxes. If you have any questions about the process give them a call at (802) 828-6802.

You should receive your account number in 5-7 days after registering online. Alternatively, your request will be processed in 10 business days if registering by mail or fax. Please keep this time frame in mind when planning your first Vermont payroll.

Vermont health care coverage (HCC)

Please note, during setup you will be asked if your company offers health care coverage to your employees. Your employees will be asked if they are covered or uncovered under Vermont law. Refer to form HC-2 for more info. If you do not offer health care coverage to all of your employees, Gusto will estimate your HCC cost with each payroll, and will make an adjustment at the end of each quarter based on the instructions in this worksheet. 

Note: Your first four full-time equivalent employees are exempt from HCC.

Form HC-2, Declaration of Health Care Coverage 

The HC-2 form must be completed every year by your employees that are uncovered for health care.

  • If their health coverage changes during the year, the employee must complete and submit a new Form HC-2 to you. 
  • If an employee is not covered by the your plan and you have no HC-2 on file for them, the law requires the employee be treated as “uncovered." 
  • Retain this form for your records for three years (you do not need to send the form to the agency). 
    • Note that this form is not currently collected or stored in Gusto. 

Health Care Contribution (HCC) Annual Statement 

Vermont requires employers to provide employees with an annual statement of the following: 

  • The total monthly premium cost paid for any employer-sponsored plan 
  • The employer’s share of the monthly premium 
  • The employee’s share of the monthly premium 
  • Any amount the employer contributes toward the employee’s cost-sharing requirement or other out-of-pocket expense. 

You can obtain this information in Gusto by going to Reports, then Benefits Reports. Select Health Insurance option(s), Date Range "Annual," and the tax year in question. 

For more information, contact the agency at (802) 828-2551 or tax.business@vermont.gov.

Unemployment tax

Most companies are liable for state unemployment if they have one or more employees in each of at least 20 different weeks in a calendar year or pay $1500 payroll in any calendar quarter. You can find out if you are liable and register with the Vermont Department of Labor online to obtain an Employer Account number. You should receive your number and tax rate in 2 weeks after registering online.

Unemployment tax rate

The tax rate for new employers is typically 1% except for specific industries such as construction. 

  • Keep in mind: Vermont typically assigns new rates each year effective July 1. When you are notified that your rate is changing, please ensure that your Vermont is updated in Gusto with the correct effective date. 

To confirm your rate, you should call the agency at (802) 828-4344.

To find the current wage base in Vermont, please check out this article

Power of Attorney (POA) Form

In order for Gusto to correctly file and pay your VT Unemployment Tax, the Vermont Department of Labor (DOL) requires that you submit a notarized Power of Attorney (POA) form. Follow these steps: 

  1. Go to the Vermont Tax Setup page in your Gusto account.
  2. Click on Edit next to 'Submit DOL POA Form.'
  3. Click on pre-filled Power of Attorney (POA) form in our tooltip.
    • Note: Gusto will fill out the second page of the form.
  4. Print the form and have it notarized.
  5. After notarizing the POA, please mail it to Gusto at the following address:
    • ATTN: Tax Ops - Audit Team
      1201 16th Street, Suite 350
      Denver, CO 80202

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