New law expands Vt. child tax credit

MONTPELIER, Vt. (WCAX) – A program aimed at boosting family finances is getting a facelift. Under a new law, more people are eligible for Vermont’s child tax credit.

Vermont’s child tax credit mirrors a similar monthly benefit paid out during the pandemic.

“What we saw from across the county and Vermont, everyone was spending it on basic needs — food, clothing, basic household stuff, health care,” said Stephanie Yu with the Public Assets Institue.

New data shows 24,000 families received about $24 million for the first payment of the Vermont child tax credit. A new bill signed into law extends the child tax credit and the earned income tax credit to families without Social Security numbers.

“The Vermont child tax credit is up to $1,000 per child and I think this will be significant for those families who were not previously,” said Vermont Tax Commissioner Craig Bolio. He says it’s unclear how many families this applies to, estimating that there are several hundred with temporary tax IDs which could benefit, “These are proven programs.” He says it also provides privacy provisions so that recipients are not discouraged from sharing their personal information with the government.

“I think that’s a reasonable fear, and we did everything we could to make sure that people’s information is protected,” said Rep. Emilie Kornheiser, D-Brattleboro.

The new law also aims to pay out the benefit more frequently. Instead of one lump sum at the beginning of the year, half of the payment would come when a family files their taxes and the other half will be paid out quarterly. At least that’s what lawmakers want.

“We are trying to see how we can work with the federal government to be clear on what’s considered income and what isn’t,” Kornheiser said.

Federal rules classify the payouts as income, which could jeopardize other federal benefits like food stamps. Kornheiser says the IRS would have to change the rules to start paying out more often.

The District of Columbia, which also has a child tax credit, is moving ahead with the quarterly payments to see whether they get dinged by the feds. If they don’t, Vermont will likely follow suit.

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