Child Tax Credit Proposal Puts Senate Finance $9 Million Over Spending Limit

The Senate Finance Committee took testimony on H.510, the House-passed Child Tax Credit, which creates a new refundable tax credit of $1,200 per child, per year for families with children under the age of 6 making a gross income of under $200,000. This tax credit has a price tag of $48 million per year. The Senate Appropriation Committee has given Senate Finance a cap of $40 million to spend this year and with roughly $900,000 in tax cuts already passed out of that committee, the Child Tax Credit proposal would put them over by $9 million. The Committee has requested a presentation from the Joint Fiscal Office with a menu of potential revenue sources that could be raised to cover the hefty price tag of this proposal. They will also be presented with possible variations on the Child Tax Credit that would bring its price tag down. The Vermont Chamber is advocating for the Legislature to focus on helping Vermonters recover from the impacts of the COVID-19 pandemic within the confines of the ARPA windfall and General Fund surplus. Any new revenue options considered should not add to the business community’s tax burden as they continue to recover from the pandemic.