Get the Vermont Child Tax Credit When You File 2022 Taxes

It’s tax time. And it’s bringing some good news for Vermonters and their kids: Eligible families with children under six years old can now receive $1,000 from the refundable Vermont Child Tax Credit when they file their 2022 tax returns. Amid rising prices and expiring pandemic assistance for housing, food, and other basics, this boost will be welcome in many Vermont households.

 

VERMONT’S CHILD TAX CREDIT

In 2021, the federal government increased the child tax credit for one year from $2,000 to $3,000 per child ($3,600 for children under six), extended it to include 17-year-olds, and made it fully refundable – families with low or no earnings could receive the full value of the credit. It helped nearly 60,000 Vermont families with kids cover the cost of food, utilities, clothing, housing, and school.

Seeing the success of the temporary federal child tax credit during the pandemic, Vermont lawmakers passed the strongest state tax credit in the country in 2022. Moving forward, the state credit will make up for some of what families lost when the federal credit expired. Vermont families making up to $125,000 in adjusted gross income will get the largest child tax credit of any state: $1,000 for every child in the household under six years old. The credit will impact nearly 99 percent of Vermont kids under six – 34,400 kids. And like the temporary federal credit, Vermont’s credit is fully refundable, helping those who need it most.

 

 

GETTING THE CREDIT TO EVERYONE

Tax filing season is the time to make sure Vermont’s child tax credit gets to everyone who qualifies. Some families will simply file their state taxes as usual, and the credit will flow into their accounts with no extra effort. But here’s the challenge: Many families with low earnings don’t have to file taxes, so they risk missing out on these credits. In 2019, 4,500 Vermont filers with children did not claim the federal Earned Income Tax Credit, a refundable tax credit targeting families with low earnings, even though they were eligible. Families missed out on an average of $2,000 if they had one child, and up to nearly $4,000 if they had two children.

During the pandemic, the feds helped non-filers by providing a simplified filing portal in English and Spanish. Through the portal, families could apply for economic impact payments and the expanded federal child tax credit. Simplified filing doesn’t currently exist in Vermont, but hopefully the state can learn from the feds and launch initiatives to make sure every eligible family gets their child tax credit.

 

HOW TO FILE

There are several resources in place to help Vermonters file. Households with internet access and an adjusted gross income under $73,000 can file online for free with some vendors. GetYourRefund is a free online tool from the IRS available to households with income under $66,000.

People making around $60,000 or less can contact their local community action agency to sign up for tax-filing support. The Volunteer Income Tax Assistance (VITA) Program, run by these community action agencies across the state, provides no-cost tax preparation for people with low incomes. Last year, VITA sites helped file 576 tax returns for Vermonters who received the expanded federal child tax credit.

With more outreach and support, Vermont can increase the number of families who receive these needed credits. Spread the word so the state’s Child Tax Credit will benefit all Vermont families.