Vermont Child Care Credit – What You Need to Know

Beginning July 1, 2024, Vermont employers and self-employed individuals will begin making contributions composed of a 0.44% payroll tax on wages and a 0.11% self-employment income tax to the Vermont Department of Taxes for deposit into the Child Care Contribution (CCC) Special Fund.

Employer Election to Withhold from Employees

Employees are not required to file or pay the CCC
Employers may choose to deduct and withhold up to 1/4 of the contribution from employee wages (not more than 0.11% of the any employee’s wages)
Employers may choose to withhold a smaller portion from employee wages or choose not to withhold any amount from employees
There is no requirement to withhold the same amount from every employee
Any amounts withheld and deducted from the employee’s paycheck should be reported on Box 14 of the employee’s W-2 for the tax year

How Employers Report and Pay the Child Care Contribution

Employers will report CCC payments quarterly on their WHT-436 Quarterly Withholding Reconciliation
Reporting will begin with the filing period of July 1, 2024 – September 30, 2024
Beginning July 1, 2024, CCC payments should be remitted to the department according to their establish withholding payment schedule (i.e. monthly, weekly, quarterly etc.)

Additional information on the Vermont Child Care Credit can be found from the Vermont Department of Taxes: