Vermont Child Care Contribution Tax

The Vermont Child Care Tax requires employers to pay a tax based on their employees’ wages earned in Vermont. The tax also allows employers to push some of the tax responsibility to their employees. This tax will go into effect on July 1, 2024, and the following updates will be live on June 18th.

Adding the VT Child Care Contribution tax

To add the VT Child Care Contribution tax navigate to Settings > Payroll > Taxes.

When adding the employer contribution (VT-Child Care-ER), the following will display:

• The Tax Deposit Frequency field is grayed out with the frequency pre-populated.
• The Employer Tax Rate field is grayed out with the base rate pre-populated to .44% by default.
• An additional “Employee Pays” field appears in this section. This field is required and will be empty by default. When entering an amount above 0 , the tax rate shown in the Tax Rate field adjusts according to the percentage entered (i.e. if you enter 25%, the tax rate changes from .44% to .33%). Saving this information will activate the employer (VT - Child Care -ER) tax and create an active employee (VT-Child Care - EE) tax in Taxes Settings.

Adding the employee (VT-Child Care-EE) tax account:

• You can only add the employee VT Child Care tax account to BambooHR by first adding the employer tax account and an Employee Pays amount in the tax setup.
• This EE tax type will not appear in the Add Tax Type drop-down in Settings > Payroll > Taxes, but will appear in the list of taxes after the ER tax type is created and has an Employee Pays amount greater than 0.

You can remove or end the VT-Child Care-ER tax, but please keep in mind this will also remove/end the active employee tax account tied to it as well (VT-Child Care-EE).

Editing the VT Child Care Contribution tax

Before a pay cycle includes this tax record, you can edit the Employee Pays percentage in the tax account settings.

Once this tax record has been included in an approved pay cycle, it can ONLY be edited in a future quarter—no changes to contributions can be made in the same quarter. The Employee Pays percentage field will be grayed out.

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