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Vermont Child Tax Credit Bill Passes House, Advances to Senate | Vermont

(The Center Square) — A child tax credit bill first introduced in the Vermont House of Representatives last month came closer to reality after passing third reading.

The legislation, sponsored by State Rep. Janet Ancel, D-Calais, would create a refundable child tax credit of $1,200 for children age 6 and under. As proposed, half of the credit would be paid to Vermonters in monthly installments, and the other half would be paid when filing a tax return.

The law project, H.510was first read in the House on January 7 and subsequently went through several committees within the legislative chamber, including Ways and Means and Supply.

During a legislative session on February 9, the House passed the bill at third reading, sending it to the Senate, where it was first read on February 11 and sent to the Finance Committee.

H.510 also contains a secondary component related to Social Security exemptions. Single taxpayers with an adjusted gross income of less than $50,000 and married taxpayers with an AGI of less than $65,000 could qualify for a full state tax exemption on Social Security benefits.

H.510, as written, includes several caveats, including exemptions from the basic child tax credit provisions for individuals with AGIs over $200,000.

State Rep. Rob Laclair, R-Barre Town, made several unsuccessful attempts to amend H.510 ahead of its passage in the Feb. 9 legislative session, including lowering the threshold for subtractions from $200,000 to $100,000. .

“Looking at statistics from the tax department, over 70% of household incomes in Vermont are below the $100,000 threshold,” Laclair said. “It looks like the $200,000 was targeting the wrong people.”

Additionally, Laclair proposed an amendment to H.510 that was also defeated: a proposed tax credit of $925 per child for all residents working as nurses and nursing assistants. Laclair presented the proposal as a recruiting tool for a profession struggling with labor shortages.

“If you had a nurse come to Vermont and she had two or three kids, that might make a difference,” Leclair said.

State Rep. Mari Cordes, D-Lincoln, serves on the House Committee on Health Care. She acknowledged the labor shortage, but suggested a different course of action on recruitment.

“We are collecting many testimonies on the workforce crisis,” Cordes said. “I think it would be wiser to continue the discussion on the tools we should use to deal with the crisis.”

State Representative John Bartholomew, D-Hartland, said he also supports keeping the bill in its original state.

“This bill is very narrow in scope. This creates a tax credit for Vermont and excludes a portion of Social Security from the taxable income of many Vermonters,” Bartholomew said. “But I don’t believe the bill allows for the many potential amendments for other tax credits or exclusions, so I don’t believe this amendment is relevant.”

The Vermont Legislative Joint Fiscal Office, a state agency, has crunch the numbers on the bill and its potential impact on the net result of the state budget.

“JFO estimates that this bill will reduce state revenue by $49.7 million in fiscal year 2023,” JFO’s Graham Campbell wrote in a tax memo. “These changes will affect the collection of personal income tax and therefore the general fund. The cost of this bill is expected to increase by $100,000 per year after fiscal year 2023.”