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Vermont Childcare Program Payroll Tax

August 31, 2023

Effective July 1, 2024, Vermont employers will be required to make contributions for a new state payroll tax for the Child Care Financial Assistance Program.

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At A Glance

  • Effective July 1, 2024, Vermont employers will be required to make contributions for a new state payroll tax for the Child Care Financial Assistance Program.
  • The contribution rate is 0.44% of an employee’s covered wages.
  • Employers may deduct a maximum of 0.11% from employees to put toward the payroll tax.

Vermont Child Care Financial Assistance Program Payroll Tax

Under House Bill 217, a new Vermont payroll tax provides funding for the Child Care Financial Assistance Program, which subsidizes childcare costs for families based on income.

Vermont employers will be required to make contributions to fund the new childcare program beginning July 1, 2024.

  • The contribution rate is set at 0.44% of an employee’s covered wage.
  • Employers may deduct up to 0.11% from employee wages; employers must cover the rest.
  • The payroll tax will be collected by the Vermont Department of Taxes and deposited in the Special Fund.

Next Steps

Paylocity is closely monitoring these changes and awaiting on additional publications to be released by the agency to support the reporting for employer.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.

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