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Ways & Means reviews H.770 language to opt Vermont out of federal scholarship tax credit
Summary
The Ways & Means Committee reviewed H.770, a proposal to prevent Vermont from participating in a new federal tax credit (HR1 §25f) that would let taxpayers claim up to $1,700 for donations to state‑listed scholarship‑granting organizations; staff and members flagged unresolved IRS rules and fiscal risks.
The Ways & Means Committee met Feb. 11 to examine draft language (H.770) that would bar Vermont from participating in a new federal scholarship tax credit created in HR1.
Herbie King, who identified himself as "Herbie King, listed at the counsel," told the panel the federal provision (section 25f) creates a federal income tax credit of up to $1,700 for contributions to so‑called scholarship‑granting organizations (SGOs). "So this this creates a federal credit of up to $1,700 for contributions to something called a scholarship granting organization," King said, adding that the credit is a reduction in federal tax liability rather than a Vermont tax benefit.
King outlined the federal conditions for SGOs to qualify for the credit: they must be 501(c)(3) organizations (not private foundations); maintain separate accounts for qualified contributions; provide scholarships to at…
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