Budget & Taxes (Tax Credits)

H 377 creates a refundable income tax credit for Vermont small businesses that advertise in qualifying local media outlets. Small businesses (defined as those with under $10 million in gross income and fewer than 100 full-time employees) can claim a 50% credit on advertising expenses, capped at $250 per year. To qualify, media outlets must meet specific criteria, including producing original local news content and meeting audience or publication requirements. The credit applies to advertising in local broadcast organizations or news organizations that serve Vermont communities, effective January 1, 2026.

This bill (H 90) increases Vermont’s earned income tax credit and child tax credit amounts and prevents these credits from being used to pay other state debts. It raises the credit percentage to 55% for households with qualifying children and 100% for households without children, based on the federal credit amount. The bill specifically prohibits tax debt setoff - meaning the state cannot seize these credits to cover unpaid taxes or other obligations. The changes apply retroactively to taxable years beginning January 1, 2025, directly benefiting low-to-moderate-income Vermont residents who qualify for these credits.

H 483 expands Vermont's tax credit programs to provide greater financial support for low- and middle-income residents. It extends the Vermont Child Tax Credit to cover children six years old or younger (previously age five), increases the Earned Income Tax Credit for individuals without qualifying children to 100% of the federal credit amount, and raises income thresholds for exempting Social Security and retirement income from state taxes. These changes directly affect families with young children, low-income workers without children, and retirees with modest incomes. The bill modifies specific Vermont tax code sections to implement these eligibility expansions and benefit increases.

Vermont's S.51 creates a $1,000-per-child refundable tax credit for residents with children under age 6, regardless of whether they or their children have a federal tax ID number. It also expands the state's earned income tax credit to cover individuals who qualify federally but lack required tax IDs, and adjusts exclusions for Social Security and Civil Service retirement income based on income thresholds (e.g., full exclusion for single filers earning ≤$55,000 or married couples ≤$70,000). The bill directly affects low-to-moderate-income families, retirees, and individuals with limited access to federal tax IDs. Signed into law by Governor on June 25, 2025, it modifies Vermont's tax code to broaden eligibility for existing federal credit programs.