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The Child Care Contribution (CCC) was created in 2023 to fund investments in Vermont’s child care system. All employers of Vermont wage earners and self-employed individuals are required to pay the CCC, which is similar to a payroll or income tax.
Employers’ Child Care Contribution (CCC) is a 0.44% payroll tax on employee wages subject to Vermont income tax withholding. Employers may choose to pay the entire 0.44% or deduct and withhold up to one-quarter of the payroll tax due (0.11%) from their employees. The WHT-436 form now includes lines for CCC; employers are required to report CCC quarterly on Form WHT-436. The filing due date is Jan. 27, 2025, for wages earned from October 2024 through December 2024.
Self-employed individuals’ CCC is a 0.11% income tax on self-employment income for work physically performed in Vermont. Self-employed individuals report and pay their CCC as part of their annual Vermont personal income tax return. Those who make estimated payments will pay the CCC in the same manner and frequency as their estimated personal income tax payments.
Because this new tax began midway through the year – July 1, 2024 – the Department will accept reporting 50% of self-employment income for the CCC for tax year 2024 only. Optionally, taxpayers may calculate CCC based on the July to December 2024 period if they can document that their self-employment income earned in that period was less than 50% of their self-employment income for all of 2024.
If you have any questions about the Child Care Contribution, please go to tax.vermont.gov/business/child-care-contribution or call 802-828-2551.
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