The bill H.90 proposes amendments to the Vermont earned income tax credit and the Vermont child tax credit. It changes the calculation of the earned income tax credit from a fixed percentage of 38% to a variable percentage based on the number of qualifying children claimed by the individual. Specifically, individuals claiming one or more qualifying children will receive 55% of the federal earned income tax credit, while those without qualifying children will receive 100%. Additionally, the bill stipulates that both the earned income tax credit and the child tax credit will not be subject to tax debt setoff, meaning these credits cannot be used to offset any tax debts owed by the individual.

Furthermore, the bill includes a retroactive effective date of January 1, 2025, applying to taxable years beginning on or after that date. This means that the changes to the tax credits will be in effect for tax filings starting in 2025, allowing individuals to benefit from the increased credits and protections against tax debt setoff from that point forward.

Statutes affected:
As Introduced: 32-5828b, 32-5830f