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 2025,  Governor Phil Scott signed Act 71 into law, which expanded the EITC to include workers without children.

The Vermont state EITC was increased from 36 percent to 38 percent in 2022 under Act 138.

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.

Eligibility Requirements: See Vermont’s tax information page for details.

Latest Legislative Action: In June 2025,  Governor Phil Scott signed Act 71 into law, which expanded the qualifying age for the Child Tax Credit to 6 years old. 

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, the committee discussed including 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 CDCTC³

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 CDCTC⁴

Eligibility:

• 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.