Vermont Assembly proposes tax credit for family caregivers providing unpaid care

The House Ways and Means Committee convened on April 8, 2025, to discuss Bill S51, which aims to provide financial support to Vermonters who serve as unpaid caregivers. The meeting highlighted the bill's provisions, findings, and implications for family caregivers in the state.

The discussion began with an acknowledgment of the challenges faced by caregivers, particularly women aged 55 and older, who contribute over 26 million hours of unpaid care daily, according to the U.S. Department of Labor. The bill's findings emphasized that many caregivers would remain in the workforce longer if they had access to financial support, potentially boosting the U.S. GDP significantly.

The bill proposes a refundable tax credit of up to $1,000 for individuals providing at least 20 hours of uncompensated care per week for a family member. This credit is prorated monthly and is designed to ease the financial burden on caregivers. To qualify, the individual receiving care must be related to the caregiver and have a medically diagnosed disability or health condition requiring assistance with daily activities.

The committee also discussed the income phase-out for the credit, which begins at an adjusted gross income of $125,000, reducing the credit by $20 for every $1,000 over that threshold. Additionally, the bill includes compliance measures, allowing the Commissioner of Taxes to request documentation to verify eligibility for the credit.

A significant addition to the bill was a requirement for a licensed medical professional to attest to the care needs of the individual receiving assistance. This form must be retained by the caregiver for three years, aligning with the audit period for tax filings.

The committee members expressed their support for the bill, recognizing its potential to provide much-needed relief to caregivers in Vermont. The discussions concluded with plans to revisit certain aspects of the bill as it moves forward in the legislative process. The proposed tax credit is set to apply to tax filings in the following year if passed, marking a significant step in supporting family caregivers across the state.