An act relating to the Vermont earned income tax credit and the Vermont child tax credit
H.90 would amend Vermont’s earned income tax credit (EITC) and child tax credit provisions. For the EITC, it changes the state credit from a flat 38% of the federal credit to a tiered structure: taxpayers claiming one or more qualifying children would receive 55% of the federal EITC, while taxpayers with no qualifying children would receive 100% of the federal EITC. The bill also preserves the existing rule that certain taxpayers who would otherwise qualify for the federal EITC, but for the lack of a qualifying taxpayer identification number for the taxpayer, spouse, or child, may still receive the Vermont credit.
The bill further provides that both the EITC and the Vermont child tax credit may not be taken by the state or another state through tax debt setoff. In practical terms, this means these refundable credits would be protected from interception to satisfy outstanding tax debts. The act is made retroactive to January 1, 2025, and would apply to taxable years beginning on or after that date.
H.90 would amend 32 V.S.A. § 5828b governing the Vermont earned income tax credit and 32 V.S.A. § 5830f governing the Vermont child tax credit. It would increase the state EITC for childless workers to 100% of the federal credit, while setting the credit for filers with qualifying children at 55% of the federal credit, replacing the current 38% structure. It would also bar both credits from being applied to tax debt setoff under Vermont law or the laws of another state, affecting how the Department of Taxes and other collection systems can intercept refundable credits.
Based on the bill text and the absence of recorded committee testimony or votes, the measure appears to be framed as a tax relief and family-support proposal, with an emphasis on increasing refundable credits for low-income workers and families. The structure suggests a generally pro-taxpayer and anti-offset policy direction. Because there is no recorded vote or transcript in the provided materials, no formal committee or floor sentiment can be identified from the legislative record here.
The main policy choices in H.90 are the new split between childless and child-rearing EITC recipients and the prohibition on tax debt setoff. The tiered credit amounts may draw attention because they treat filers with children differently from those without children, and the setoff prohibition could be controversial for lawmakers concerned about limiting the state’s ability to collect delinquent tax debts. Any debate would likely center on balancing refundable tax relief for low-income households against revenue collection and debt enforcement interests.