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Vermont Senate Finance committee hears S.51 to create refundable unpaid-caregiver tax credit
Summary
Senate Finance discussed S.51, a bill to create a refundable personal income tax credit for unpaid family caregivers. Lawmakers and counsel reviewed eligibility criteria, phase-out thresholds and administrative issues and agreed to ask the Department of Taxes to brief the committee on implementation.
Senate Finance members discussed S.51 on an unpaid-caregiver tax credit during a committee meeting, hearing sponsor remarks, legal counsel explanation and questions about administration, eligibility and fiscal impact.
The committee heard that S.51 would create a refundable personal income tax credit up to $2,500, prorated monthly, for resident taxpayers who provide at least 20 hours per week of uncompensated care to a qualifying relative, subject to income phase-outs beginning at $125,000 adjusted gross income (AGI) and ending at $175,000 AGI. Counsel described the credit as refundable, and the bill as including statutory findings citing national estimates of unpaid caregiving and lifetime employment-related costs to caregivers.
The bill’s sponsor said the proposal grew from four years of Health & Welfare testimony and personal experience with family caregiving. The sponsor credited students who researched the issue and noted AARP, Urban Institute and Commonwealth Fund reports cited in the bill’s findings. The sponsor emphasized that while older women are overrepresented among unpaid caregivers, eligibility is not limited by age or gender.
Committee members and counsel focused on administration and scope: how the Department of Taxes would verify the 20-hours-per-week requirement, what documentation the department could request, and how the credit’s prorating would interact with other public benefits. Counsel described the bill’s key eligibility elements: the care recipient must be related by blood, marriage or adoption; need assistance with daily activities or home health care; have a medically diagnosed disability or health condition; and not be in a nursing facility (all listed requirements must be met). Counsel also explained that the department may, at its discretion, request supporting documentation when processing claims.
Members compared S.51’s structure to other states and international approaches: some U.S. states limit the credit by annual caps or base credits on eligible out-of-pocket expenses; Canada’s comparable program uses a different definition and a nonrefundable credit. Committee discussion noted that the bill’s income thresholds would encompass a large share of Vermont tax returns and that take-up rates and fiscal cost remain uncertain without Department of Taxes estimates. Several members said they want the tax department to analyze implementability, verification burdens, and likely participation before the committee advances the bill.
The committee agreed to request a formal briefing from the Department of Taxes on administration and fiscal impact. No formal vote on S.51 occurred at the hearing.
