Vermont is moving forward with a new tax package that could put thousands of dollars of cash into the pockets of families through an expanded child tax credit. The House and Senate lawmakers hammered out a deal on its H.510 bill, approving a $ 40 million tax-cut package that, in part, will give families below a certain income threshold $ 1,000 per kid in the form of a child tax credit. The two chambers worked quickly to agree on the tax credit provisions, and on Thursday, May 12th, it hit Governor Phil Scott’s desk, awaiting his signature.
In February, the Vermont House passed a $ 48 million tax package that was modeled after the federal child tax credit, the first-of-its-kind program that gave families anywhere from $ 250 to $ 350 per month as part of an expanded child tax credit program, and one that lifted millions of American kids out of poverty. The program came to an end at the end of 2021, and since then, it’s estimated that 3.4 million kids have fallen back into poverty with the end of the fully refundable and expanded tax credit.
While that program has since lapsed, the state House members in Vermont wanted to expand their own state child tax credit program and send $ 1,200 to every family making $ 200,000 or less for each child under six years old and continue some sort of assistance to families who live in the state, per VT Digger’s reporting. There was some back and forth – the Senate countered with a bill that would phase out payments to families making more than $ 55,000 and would end after three years.
However, the two chambers came to an agreement and the final bill would give families $ 1,000 per child five or under, with households making $ 125,000 or less eligible for the full tax credit. For families making above the income threshold, they will receive $ 20 less for every $ 1,000 over the income threshold they make.
The bill, should it be signed by Governor Phil Scott, will impact approximately 33,000 children in the state and is estimated to cost the state an estimated $ 32 million. It’s hoping to give parents a similar avenue of support that the federal child tax credit gave parents last year during the pandemic, and although it might not come in the form of monthly payments, will give parents a nice tax cut or bonus, even, when they file their taxes next year.
While it’s not clear if Governor Scott will put his signature on the bill, if he does, Vermont will have one of the more generous child tax credits nationwide.