Senate Finance hears testimony on S.51, proposed unpaid caregiver tax credit

On Feb. 19, the Vermont Senate Finance Committee took testimony on S.51, an act to create a Vermont unpaid (paid in the bill text) caregiver tax credit that would provide refundable credits to qualifying family caregivers.

Advocates told the committee the credit would recognize and partially offset substantial unpaid labor and out-of-pocket costs that family caregivers provide for people with dementia and other long-term care needs. Meg Pulley, policy director for the Vermont chapter of the Alzheimer—s Association, said the bill—s findings and a refundable structure are important for caregivers with low incomes and those who do not typically receive refunds.

Pulley said state data show that in 2020 at least 12,800 Vermonters age 65 and older had a diagnosis of Alzheimer—s disease and that last year 19,000 Vermonters provided about 28,000,000 hours of unpaid care to people with dementia, a contribution she said the association values at about $615,000,000. "Caregivers for those living with Alzheimer's or other dementia play an essential role in maintaining the quality of life for their loved ones and helping them to remain independent in their homes and communities," Pulley said.

Carrie Brown, executive director of the Vermont Commission on Women, framed the proposal as partial redress for the economic effects of unpaid caregiving that fall disproportionately on women. Brown noted research and state labor statistics showing women are more likely to work part time and to make career sacrifices for caregiving, saying the credit would not replace lost wages but would "recognize the value that unpaid care work brings to our whole economy."

AARP Vermont—s testimony emphasized scale and methodology. Colin Hilliard, executive director of AARP Vermont, cited an AARP Public Policy Institute estimate of roughly 70,000 Vermonters providing unpaid care and said those caregivers supply an estimated 66,000,000 hours of care annually with an economic value estimated at about $1.23 billion. Hilliard also said the national average caregiver time is about 20 hours per week and that states take differing approaches to tax credits, with many linking credits to documented out-of-pocket expenses.

Committee members and tax department staff focused on two central implementation challenges: (1) how many Vermonters would actually qualify and claim the credit, and (2) how the state would verify eligibility. Committee members noted an initial, high cost estimate that assumed all 70,000 caregivers would receive the full $2,500 credit (a figure discussed during the hearing), which produced an estimated fiscal exposure that some described as infeasible for the state budget. Chair Cummings and other senators asked advocates to propose narrower eligibility criteria.

Tax department staff said existing survey-based caregiver counts vary by definition and that the 20-hours-per-week measure is not tracked on tax returns and would likely rely on self-attestation. Patrick (tax department staff, present in the hearing) warned about administrative limits and audit capacity, noting "our tax system is built on voluntary compliance" and pointing to Canada—s modest uptake as a possible guide for Vermont.

Advocates and staff suggested several narrowing or verification approaches that the committee could consider: limiting eligibility by income (the bill as introduced uses the child tax credit income range up to $175,000), tying eligibility to activities-of-daily-living (ADL) assessments used by providers and agencies, requiring a diagnosis or clinical documentation for dementia-related claims, or focusing initially on higher-need caregivers (for example, full-time equivalents such as 40 hours per week).

Advocates flagged practical barriers that could affect access, including a reported backlog of more than 500 people on the UVM Memory Center wait list for diagnostic services, and urged the committee to consider timing and diagnostic access when defining verification requirements.

No formal vote or final action on S.51 occurred at the hearing. Committee members asked advocates to return with narrower draft language and additional data for budget and administrative review by the Joint Fiscal Office and the Department of Taxes.

Next steps: committee staff and advocates agreed to refine eligibility definitions and work with JFO and the Department of Taxes on narrower cost estimates; a follow-up or revised draft was expected in a subsequent meeting.