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Taxation of Employee Benefits: Vermont

Taxation of Employee Benefits requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor


  • Employee contributions to an Internal Revenue Code (IRC) § 125 cafeteria plan are taxable for state unemployment insurance (SUI) purposes. See Salary Deferrals to IRC § 125 Cafeteria Plans.
  • Same-sex marriages and civil unions are legal in Vermont. The value of health insurance benefits provided to an employee's same-sex spouse or civil union partner, and/or their dependents, is not taxable. See Same-Sex Couple Health Insurance Benefits.