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Tax Credits

CHILD & DEPENDENT CARE CREDIT

Taxpayers have two options for a child and dependent care credit.  Taxpayers select the credit, but cannot take both credits.

1]  Percentage of Federal Child and Dependent Care Credit
32 V.S.A. §5822(d)


24% of the Federal child and dependent care tax credit from Federal Form 1040 Line 48 or 1040A Line 29. This is a  non refundable credit.   Use Schedule IN-112, Part II, Line 8 to claim credit.
Credit Limitation:
Must be eligible for and receive the Federal tax credit.


2]  Low Income Child & Dependent Care Credit -
32 V.S.A. § 5828c


Purpose: Provide assistance to working parents and caregivers.

Credit Amount:
50% of the Federal child and dependent care tax credit from Federal Form 1040 Line 48 or 1040A Line 29. This is a   refundable credit.  For eligible taxpayers, this replaces the 24% of Federal credit.  Use Line 31g of Form IN-111 to claim credit.  You may be asked for a copy of your Federal Form 2441 to verify care was provided by an accredited provider.

Credit Limitation:
Must be eligible for and receive the Federal tax credit.

Must meet the following criteria:

  - $29,999 or less AGI for Single or Head of Household filing      status
  - $39,999 or less AGI for Married Joint or Civil Union Joint filing      status
  - Service provider is accredited by Agency of Human Services

If your Federal credit is based on accredited and non-accredited providers, complete this worksheet to determine if taking the 50% of the eligible Federal credit or 24% of the entire Federal credit is best for you.

 

 

Click here for list of Accredited Care Providers

 

For More Information:
Vermont Department of Taxes
133 State Street
Montpelier, Vermont 05633
Tel: 866-828-2865 (toll-free in Vermont)
802-828-2865 (local & out-of-state)

 

Other Tax Credits:
- Affordable Housing
- Charitable Housing
- Commercial Film Production
- Income Tax Paid to Another
  State or Canadian Province

- Low Income Child &
  Dependent Care

- Qualified Sale of Mobile
  Home Park

- Vermont Earned Income
  Credit

- Vermont Employment
  Growth Incentive (VEGI)

- Vermont Higher Education
  Investment

- Vermont Seed Capital Fund

 
Vermont Department of Taxes, 133 State Street, Montpelier, Vermont 05633-1401