Child Tax Credit Update: Vermont Becomes 10th State to Create Its Own Tax Cut Package
Governor Phil Scott of Vermont has signed a new tax cut package that includes a state-wide child tax credit (CTC) for children 5 and under in households earning $125,000 or less, VTDigger.org reported.
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The tax credit will phase out at a rate of $20 per every $1,000 earned over that threshold, according to a summary of the act published at legislature.vermont.gov. The credit is fully refundable.
Act 138 (Bill H.510) also allows for a fully refundable child and dependent care credit of 72% of the federal child and dependent care credit allowed to the taxpayer and increases the earned income tax credit to 38% of the amount granted by the federal government. It also includes tax relief for student loan borrowers, retirees, and veterans.
The final version of the $40 million bill allocates $32 million to pay for the new state-wide CTC, which legislators estimate will help more than 30,000 Vermont children.
In a June 3 statement Scott called the bill “a step in the right direction,” noting that previous proposals, including a package worth nearly $50 million, “would have helped a broader cross-section of taxpayers.”