EARNED INCOME TAX CREDIT (EITC)
Rate (Fully-Refundable): 38% of the federal credit
Eligibility Requirements: All Vermont taxpayers who qualify for the federal credit are automatically eligible.
Latest Legislative Action: In June 2018, Vermont enacted a state budget for Fiscal Year 2019 that included an expansion of the state’s EITC from 32 to 36 percent of the federal credit.
Notes: During the 2013 legislative session, lawmakers considered a bill that would have increased the state’s EITC to 34% of the federal credit. However, the bill did not advance out of committee.
CHILD TAX CREDIT (CTC)
Rate (Fully-Refundable): $1,000 per qualifying child.
Latest Legislative Action: On May 27, 2022, Governor Phil Scott signed legislation to enact a state-level Child Tax Credit worth $1,000 per child under 5 years old as part of a larger tax cut package. During the revision process, there was discussion over a sunset provision. The condition was removed in the final version of the bill, making the tax credit a permanent benefit.
CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)
Vermont offers two versions of the state CDCTC with a more generous (and refundable) benefit for low income families.
Credit for Child and Dependent Care
Rate (Fully-Refundable): 72% of federal CDCTC2
Eligibility: All Vermont taxpayers who qualify for the federal credit are automatically eligible.
Low Income Child and Dependent Care Credit
Rate (Fully-Refundable): 50% of federal CDCTC3
- Those filing as Single or Head of Household must have less than $29,999 in adjusted gross income.
- Those filing Married Jointly or Civil Union Jointly must have less than $39,999 in adjusted gross income.
- Parents must use an accredited provider on the List of Child Care Programs Qualifying for the Vermont Low Income Child and Dependent Care Tax Credit.
Note: Those that qualify for the low income CDCTC may not file for both versions of the credit.
- Vermont Earned Income Tax Credit Information, Vermont Department of Taxes
- Tax Credits and Adjustments for Individuals