July 18, 2024

Financial Management

Vermont Child Care Credit – What You Need to Know

By: Farm Credit East Knowledge Exchange

Business

Beginning July 1, 2024, Vermont employers and self-employed individuals will begin making contributions composed of a 0.44% payroll tax on wages and a 0.11% self-employment income tax to the Vermont Department of Taxes for deposit into the Child Care Contribution (CCC) Special Fund.

Employer Election to Withhold from Employees

  • Employees are not required to file or pay the CCC
  • Employers may choose to deduct and withhold up to 1/4 of the contribution from employee wages (not more than 0.11% of the any employee’s wages)
  • Employers may choose to withhold a smaller portion from employee wages or choose not to withhold any amount from employees
  • There is no requirement to withhold the same amount from every employee
  • Any amounts withheld and deducted from the employee’s paycheck should be reported on Box 14 of the employee’s W-2 for the tax year

How Employers Report and Pay the Child Care Contribution

  • Employers will report CCC payments quarterly on their WHT-436 Quarterly Withholding Reconciliation
  • Reporting will begin with the filing period of July 1, 2024 – September 30, 2024
  • Beginning July 1, 2024, CCC payments should be remitted to the department according to their establish withholding payment schedule (i.e. monthly, weekly, quarterly etc.)

Additional information on the Vermont Child Care Credit can be found from the Vermont Department of Taxes:

  • Webinar: The Vermont Child Care Contribution for Employers. View it here.
  • Resource document: The Vermont Child Care Contribution. View it here.
 

Please reach out to your Farm Credit Payroll Processor for more information. 

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Tags: payroll, accounting, taxes

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