BILL AS INTRODUCED H.483
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H.483 1
Introduced by Committee on Ways and Means 2
Date: 3
Subject: Taxation; income tax; tax credits 4
Statement of purpose of bill as introduced: This bill proposes to expand the 5
eligibility requirement for the Vermont Child Tax Credit to allow a credit for 6
children six years of age or younger, expand the earned income tax credit for 7
individuals without qualifying children to 100 percent of the federal credit, and 8
increase the income thresholds used to determine eligibility for the partial 9
exemption of Social Security benefits and retirement income. 10
An act relating to the expansion of existing income tax credits 11
It is hereby enacted by the General Assembly of the State of Vermont: 12
Sec. 1. PURPOSE 13
The purpose of this act is to: 14
(1) expand the eligibility requirement for the Vermont Child Tax Credit 15
to allow a credit for children six years of age or younger; 16
(2) expand the earned income tax credit for individuals without 17
qualifying children to 100 percent of the federal credit; and 18
(3) increase the income thresholds used to determine eligibility for the 19
partial exemption of Social Security benefits and retirement income. 20 BILL AS INTRODUCED H.483
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Sec. 2. 32 V.S.A. § 5830f is amended to read: 1
§ 5830f. VERMONT CHILD TAX CREDIT 2
(a) A resident individual or part-year resident individual who is entitled to a 3
child tax credit under the laws of the United States or who would have been 4
entitled to a child tax credit under the laws of the United States but for the fact 5
that the individual or the individual’s spouse does not have a taxpayer 6
identification number shall be entitled to a refundable credit against the tax 7
imposed by section 5822 of this title for the taxable year. The total credit per 8
taxable year shall be in the amount of $1,000.00 per qualifying child, as 9
defined under 26 U.S.C. § 152(c) but notwithstanding the taxpayer 10
identification number requirements under 26 U.S.C. § 24(e) and (h)(7), who is 11
five six years of age or younger as of the close of the calendar year in which 12
the taxable year of the taxpayer begins. For a part-year resident individual, the 13
amount of the credit shall be multiplied by the percentage that the individual’s 14
income that is earned or received during the period of the individual’s 15
residency in this State bears to the individual’s total income. An otherwise 16
eligible individual shall be entitled to the credit under this section without 17
regard for the laws of the United States pertaining to the amount of federal 18
child tax credit that may be refunded. 19
* * * 20 BILL AS INTRODUCED H.483
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Sec. 3. 32 V.S.A. § 5828b is amended to read: 1
§ 5828b. EARNED INCOME TAX CREDIT 2
(a) A resident individual or part-year resident individual who is entitled to 3
an earned income tax credit granted under the laws of the United States or who 4
would have been entitled to an earned income tax credit under the laws of the 5
United States but for the fact that the individual, the individual’s spouse, or one 6
or more of the individual’s children does not have a qualifying taxpayer 7
identification number shall be entitled to a credit against the tax imposed for 8
each year by section 5822 of this title. The credit shall be for an individual 9
who claims one or more qualifying children 38 percent or for an individual 10
who does not claim one or more qualifying children 100 percent of the earned 11
income tax credit granted to the individual under the laws of the United States 12
or that would have been granted to the individual under the laws of the United 13
States but for the fact that the individual, the individual’s spouse, or one or 14
more of the individual’s children does not have a qualifying taxpayer 15
identification number, multiplied by the percentage that the individual’s 16
income that is earned or received during the period of the individual’s 17
residency in this State bears to the individual’s total income. A resident 18
individual or part-year resident individual who would have been entitled to or 19
granted an earned income tax credit under the laws of the United States but for 20
the fact that the individual, the individual’s spouse, or one or more of the 21 BILL AS INTRODUCED H.483
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individual’s children does not have a qualifying taxpayer identification number 1
shall be entitled to a credit under this section. 2
* * * 3
Sec. 4. 32 V.S.A. § 5830e is amended to read: 4
§ 5830e. RETIREMENT INCOME; SOCIAL SECURITY INCOME 5
(a) Social Security income. The portion of federally taxable Social 6
Security benefits excluded from taxable income under subdivision 7
5811(21)(B)(iv) of this chapter shall be as follows: 8
(1) For taxpayers whose filing status is single, married filing separately, 9
head of household, or surviving spouse: 10
(A) If the federal adjusted gross income of the taxpayer is less than or 11
equal to $50,000.00 $55,000.00, all federally taxable benefits received under 12
the federal Social Security Act shall be excluded. 13
(B) If the federal adjusted gross income of the taxpayer is greater than 14
$50,000.00 $55,000.00 but less than $60,000.00 $65,000.00, the percentage of 15
federally taxable benefits received under the Social Security Act to be 16
excluded shall be proportional to the amount of the taxpayer’s federal adjusted 17
gross income over $50,000.00 $55,000.00, determined by: 18
(i) subtracting the federal adjusted gross income of the taxpayer 19
from $60,000.00 $65,000.00; 20 BILL AS INTRODUCED H.483
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(ii) dividing the value under subdivision (i) of this subdivision (B) 1
by $10,000.00; and 2
(iii) multiplying the value under subdivision (ii) of this subdivision 3
(B) by the federally taxable benefits received under the Social Security Act. 4
(C) If the federal adjusted gross income of the taxpayer is equal to or 5
greater than $60,000.00 $65,000.00, no amount of the federally taxable 6
benefits received under the Social Security Act shall be excluded under this 7
section. 8
(2) For taxpayers whose filing status is married filing jointly: 9
(A) If the federal adjusted gross income of the taxpayer is less than or 10
equal to $65,000.00 $70,000.00, all federally taxable benefits received under 11
the Social Security Act shall be excluded. 12
(B) If the federal adjusted gross income of the taxpayer is greater than 13
$65,000.00 $70,000.00 but less than $75,000.00 $80,000.00, the percentage of 14
federally taxable benefits received under the Social Security Act to be 15
excluded shall be proportional to the amount of the taxpayer’s federal adjusted 16
gross income over $65,000.00 $70,000.00, determined by: 17
(i) subtracting the federal adjusted gross income of the taxpayer 18
from $75,000.00 $80,000.00; 19
(ii) dividing the value under subdivision (i) of this subdivision (B) 20
by $10,000.00; and 21 BILL AS INTRODUCED H.483
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(iii) multiplying the value under subdivision (ii) of this subdivision 1
(B) by the federally taxable benefits received under the Social Security Act. 2
(C) If the federal adjusted gross income of the taxpayer is equal to or 3
greater than $75,000.00 $80,000.00, no amount of the federally taxable 4
benefits received under the Social Security Act shall be excluded under this 5
section. 6
(b) Civil Service Retirement System income. The portion of income 7
received from the Civil Service Retirement System excluded from taxable 8
income under subdivision 5811(21)(B)(iv) of this title shall be subject to the 9
limitations under subsection (e) of this section and shall be determined as 10
follows: 11
(1) For taxpayers whose filing status is single, married filing separately, 12
head of household, or surviving spouse: 13
(A) If the federal adjusted gross income of the taxpayer is less than or 14
equal to $50,000.00 $55,000.00, the first $10,000.00 of income received from 15
the Civil Service Retirement System shall be excluded. 16
(B) If the federal adjusted gross income of the taxpayer is greater than 17
$50,000.00 $55,000.00 but less than $60,000.00 $65,000.00, the percentage of 18
the first $10,000.00 of income received from the Civil Service Retirement 19
System to be excluded shall be proportional to the amount of the taxpayer’s 20
federal adjusted gross income over $50,000.00 $55,000.00, determined by: 21 BILL AS INTRODUCED H.483
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(i) subtracting the federal adjusted gross income of the taxpayer 1
from $60,000.00 $65,000.00; 2
(ii) dividing the value under subdivision (i) of this subdivision (B) 3
by $10,000.00; and 4
(iii) multiplying the value under subdivision (ii) of this subdivision 5
(B) by the first $10,000.00 of income received from the Civil Service 6
Retirement System. 7
(C) If the federal adjusted gross income of the taxpayer is equal to or 8
greater than $60,000.00 $65,000.00, no amount of the income received from 9
the Civil Service Retirement System shall be excluded under this section. 10
(2) For taxpayers whose filing status is married filing jointly: 11
(A) If the federal adjusted gross income of the taxpayer is less than or 12
equal to $65,000.00 $70,000.00, the first $10,000.00 of income received from 13
the Civil Service Retirement System shall be excluded. 14
(B) If the federal adjusted gross income of the taxpayer is greater than 15
$65,000.00 $70,000.00 but less than $75,000.00 $80,000.00, the percentage of 16
the first $10,000.00 of income received from the Civil Service Retirement 17
System to be excluded shall be proportional to the amount of the taxpayer’s 18
federal adjusted gross income over $65,000.00 $70,000.00, determined by: 19
(i) subtracting the federal adjusted gross income of the taxpayer 20
from $75,000.00 $80,000.00; 21 BILL AS INTRODUCED H.483
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(ii) dividing the value under subdivision (i) of this subdivision (B) 1
by $10,000.00; and 2
(iii) multiplying the value under subdivision (ii) of this subdivision 3
(B) by the first $10,000.00 of income received from the Civil Service 4
Retirement System. 5
(C) If the federal adjusted gross income of the taxpayer is equal to or 6
greater than $75,000.00 $80,000.00, no amount of the income received from 7
the Civil Service Retirement System shall be excluded under this section. 8
* * * 9
Sec. 5. EFFECTIVE DATE 10
Notwithstanding 1 V.S.A. § 214, this act shall take effect retroactively on 11
January 1, 2025 and shall apply to taxable years beginning on and after 12
January 1, 2025. 13