$1000 Vermont Child Tax Credit Per Child Under 6, Full Eligibility Rules & How to Claim It

Vermont Child Tax Credit: Vermont families filing their state return this season can claim up to $1,000 per qualifying child through the Vermont Child Tax Credit, and for the first time this credit now reaches children up to their sixth birthday instead of stopping at age 5. The change comes from Act 71 of 2025, an affordability package Governor Phil Scott signed on June 25, 2025, and it applies retroactively to the entire 2025 tax year, meaning the wider age window is already in effect for the return most Vermonters are filing right now. The Vermont Department of Taxes opened the 2025 filing season on January 26, 2026, with a standard deadline of April 15, 2026, and Tax Commissioner Bill Shouldice has been actively urging eligible households, including roughly 40,000 Vermonters who typically do not file because their income is below the filing threshold, not to leave this refundable money on the table.

What makes this update genuinely newsworthy is how the credit is performing in its first expanded year. State officials presented updated figures at the Statehouse showing the Vermont Child Tax Credit and its companion, the newly boosted Vermont Earned Income Tax Credit (EITC), are landing close to what legislative budget analysts projected when Act 71 passed, unlike a separate veteran credit in the same package that came in far below estimates. Because the credit is fully refundable, families receive the cash value even if they owe zero Vermont income tax, and because filers can still submit a return through the October 15, 2026 extension deadline, thousands of eligible households have not yet claimed this year’s payment. We’ll be updating this article monthly as the Department of Taxes releases new filing statistics and guidance, so check back rather than relying on outdated numbers.

What Is the Vermont Child Tax Credit?

The Vermont Child Tax Credit is a state-level, fully refundable tax credit for Vermont families with young children. It is separate from, and stacks on top of, the federal Child Tax Credit, so claiming one does not reduce or replace the other. The credit was first created to help working families offset the rising cost of raising small children, and it has been expanded twice through state legislation, most recently through Act 71 of 2025, also referred to as S.51, which raised the maximum qualifying age from 5 to 6.

Because it is refundable, the Vermont Child Tax Credit works differently from a typical deduction. It first reduces whatever state income tax you owe, and if the credit amount is larger than your tax liability, the Department of Taxes pays you the difference as part of your refund. A family that owes no Vermont tax at all still receives the full credit amount in cash, which is why the Department stresses that even non-filers with very low income should submit a return to collect it.

One detail that sets Vermont apart from many other states is that the credit does not require a Social Security Number. Act 71 specifically extended eligibility to taxpayers, spouses, and qualifying children who only have an Individual Taxpayer Identification Number (ITIN), removing a barrier that had shut out many immigrant and mixed-status families in prior years.

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Who Qualifies for the Vermont Child Tax Credit?

Eligibility for the Vermont Child Tax Credit rests on three main conditions, and all three need to be met for each child you claim.

You must be a Vermont resident or part-year resident. Full-year residents claim the credit in full, subject to the income phase-out. Part-year residents receive a prorated credit, calculated based on the share of their total income that was earned or received while they were living in Vermont during the tax year.

Your child must be 6 years old or younger at the close of the tax year. The Department of Taxes uses a straightforward cutoff: if the child turned 7 before December 31, they no longer qualify for that tax year, even if they were 6 for most of it. The Department’s own guidance gives the example of a child who turns seven in July; that child’s parents will not receive the credit for that tax year because the child was already seven when the year ended.

Your household income must fall within the eligibility range. There is no minimum earned income requirement to claim this credit, unlike some federal credits, but the benefit shrinks and eventually disappears as AGI climbs past $125,000, regardless of whether you file singly or jointly.

Unlike many federal family credits, Vermont’s version has no SSN requirement. A taxpayer, spouse, or child with only an ITIN can still be included, which the state has highlighted as one of the most consequential parts of Act 71’s expansion.

Vermont Child Tax Credit Income Limits and Phase-Out Explained

The income phase-out is one of the most misunderstood parts of this credit, so it helps to see exactly how the math works.

• Families with an AGI of $125,000 or less receive the full $1,000 per qualifying child, regardless of filing status.
• Once AGI exceeds $125,000, the credit is reduced by $20 for every additional $1,000 of income, or fraction thereof.
• The phase-out threshold is identical for single filers and joint filers; Vermont does not use a higher threshold for married couples on this particular credit.
• The credit reaches $0 once AGI hits $175,000, which works out to the full $1,000-per-child benefit phasing out over a $50,000 income band.

For example, a Vermont family with two qualifying children and an AGI of $135,000 would be $10,000 over the threshold. That is 10 increments of $1,000, so the credit per child is reduced by $200, bringing each child’s credit down from $1,000 to $800, for a combined credit of $1,600 instead of the full $2,000.

How Much Can a Vermont Family Actually Receive?

Because the credit is per child rather than per return, larger families with incomes under the phase-out threshold see the benefit multiply quickly.

Families should also remember that Vermont expanded its companion Earned Income Tax Credit in the same legislation. Vermont workers without children now receive an EITC equal to 100% of the federal EITC amount, up from 38% previously, while workers with qualifying children continue to receive 38% of the federal amount. Stacked together, a low-income Vermont household with young children could see a meaningful combined state refund from the Child Tax Credit and EITC alone, on top of whatever federal credits they qualify for separately.

How to Apply for the Vermont Child Tax Credit (Step by Step)

There is no separate application or registration process for this credit. It is claimed directly on your Vermont income tax return. Here is the practical process:

1. Confirm your child’s age and residency status. The child must have been 6 or younger on December 31 of the tax year, and you must have been a Vermont resident or part-year resident during that year.
2. Gather documentation. You will need each qualifying child’s name and either a Social Security Number or an ITIN, along with your own identifying information and income records such as W-2s, 1099s, or federal Schedule C for self-employment income.
3. File your federal return first if possible. Vermont’s income tax return starts from your federal Adjusted Gross Income, so having your federal numbers finalized makes the state form faster to complete.
4. Complete Form IN-111, the Vermont Income Tax Return. The Child Tax Credit is calculated directly on this form using the number of qualifying children multiplied by $1,000, then adjusted by the phase-out table if your AGI exceeds $125,000.
5. Choose how you will file. Options include commercial e-file software, a paid preparer, Vermont’s Free File program for income-eligible filers, or free help through Volunteer Income Tax Assistance (VITA) sites, several of which reported filing thousands of returns for Vermonters this season.
6. Submit by April 15, 2026, or request a free extension to file by October 15, 2026, if you need more time. Note that a filing extension does not extend the deadline to pay any tax owed, though the Child Tax Credit itself is unaffected either way since it is refundable.
7. Track your return through myVTax, the Department’s free online portal, which does not require a login for basic services such as checking refund status.

If you had a qualifying child under the old age-5 rule but your child turned 6 before this expansion took effect, or if you simply missed claiming the credit in a prior eligible year, you can generally amend a previously filed Vermont return to claim it.

Vermont Child Tax Credit Processing Time: When Will You Get Paid?

Processing time depends on how you file and whether your return needs manual review.

• Electronically filed returns with direct deposit are processed fastest and are the method the Department of Taxes actively encourages for quicker refunds.
• Paper returns take noticeably longer because of manual data entry, and the Department specifically warns that filing before you have all your W-2s and 1099s in hand is one of the most common reasons a refund gets delayed.
• Returns that trigger a request for more information are not automatically flagged as errors or audits; the Department describes this as a routine part of processing, but your return cannot move forward until you respond, so replying promptly through myVTax speeds things up considerably.
• Refunds may be reduced or withheld if you or your spouse owe a debt to the Department of Taxes or another government agency, such as the IRS or the Office of Child Support, in which case the Child Tax Credit portion is applied against that debt first.

Payment Schedule: Vermont State Refund vs Federal Refund Timing

Vermont’s Child Tax Credit refund and any federal refund you are owed come from two entirely separate agencies on two separate timelines, so delays in one do not indicate a problem with the other.

Documents You Need Before You File

• Social Security cards or ITIN letters for yourself, your spouse or civil union partner, and every qualifying child
• W-2 forms from all employers for the year
• 1099 forms for self-employment, gig, or freelance income
• A completed federal Form 1040, since your Vermont AGI starts from your federal return
• Proof of Vermont residency dates if you were a part-year resident
• Prior-year Vermont return, useful if you plan to amend an earlier year
• Bank account and routing number for direct deposit

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Common Mistakes That Delay or Reduce the Vermont Child Tax Credit

• Filing before all income documents arrive. The Department of Taxes lists this as one of the single most common causes of refund delays statewide.
• Missing the age-6 cutoff. Because eligibility is based on the child’s age as of December 31, families sometimes wrongly claim a child who turned 7 earlier that same year.
• Forgetting the phase-out applies per child, not per return. A household with multiple children above the AGI threshold needs to reduce the credit separately for each child, not apply one flat reduction to the total.
• Not filing at all due to low income. Since the credit is fully refundable, non-filers with income below the filing threshold still need to submit a return to actually receive the payment.
• Overlooking ITIN eligibility. Some households wrongly assume a lack of a Social Security Number disqualifies them, when Act 71 specifically opened this credit to ITIN filers.

Vermont Child Tax Credit vs Federal Child Tax Credit: What Is the Difference?

Both credits can be claimed for the same child in the same year, since one is a state benefit and the other is federal, and claiming one has no effect on your eligibility for the other.

Official Resources and Direct Links

Frequently Asked Questions

How much is the Vermont Child Tax Credit worth per child? The credit is worth up to $1,000 per qualifying child for families with an Adjusted Gross Income of $125,000 or less, phasing out completely at $175,000.

What age does my child need to be to qualify? Your child must be 6 years old or younger at the end of the tax year. This was raised from age 5 under Act 71 of 2025.

Is the Vermont Child Tax Credit fully refundable? Yes. If the credit is larger than your Vermont tax liability, the Department of Taxes pays you the remaining amount as part of your refund, even if you owe no state tax.

Do I need a Social Security Number to claim this credit? No. Vermont allows taxpayers, spouses, and qualifying children with only an Individual Taxpayer Identification Number to claim the credit.

What form do I use to claim the Vermont Child Tax Credit? Form IN-111, the Vermont Income Tax Return, which includes the Child Tax Credit calculation directly on the form.

When is the deadline to file for the Vermont Child Tax Credit? The standard deadline is April 15, 2026, with an extended filing deadline of October 15, 2026, for those who request more time.

Can I still claim the credit if I have not filed a Vermont return in past years? Yes, if you were eligible in a prior year, you can generally file or amend a return for that year to claim the credit retroactively.

How do I check my Vermont Child Tax Credit refund status? Use the Department of Taxes’ “Check the Status of your Return” service through myVTax, since the credit is included in your overall state refund rather than tracked as a separate payment.

People Also Ask

Is the Vermont Child Tax Credit the same as the federal Child Tax Credit? No. Vermont’s credit is a separate state benefit worth up to $1,000 per child age 6 or younger, while the federal Child Tax Credit covers children under 17 and is worth up to $2,200 per child.

Who is eligible for the Vermont Child Tax Credit income phase-out? Any filer, single or joint, with an Adjusted Gross Income above $125,000 sees the credit reduced by $20 for every additional $1,000 of income, reaching zero at $175,000.

Does Vermont’s Child Tax Credit require earned income? No minimum earned income is required, unlike some federal family credits, though your total household AGI still determines whether the credit is reduced.

What is Act 71 and how does it affect Vermont families? Act 71 of 2025 is the affordability package Governor Phil Scott signed in June 2025 that raised the Child Tax Credit’s qualifying age from 5 to 6, expanded the state Earned Income Tax Credit, and created a new credit for income-eligible veterans.

Conclusion

The Vermont Child Tax Credit has become noticeably more valuable this filing season now that it reaches children up to age 6 instead of stopping at 5, and the fact that it is fully refundable and open to ITIN filers makes it one of the more accessible family benefits in the state. Households with an AGI under $125,000 should expect the full $1,000 per qualifying child, while higher earners can still receive a partial credit up to $175,000 in income. Filing costs nothing through Vermont’s Free File program or a local VITA site, and with the extended deadline running through October 15, 2026, there is still time this season for eligible Vermonters, including the tens of thousands who typically skip filing altogether, to claim what the state owes them. Watch for updated Department of Taxes filing statistics later this year, and check back here since we will update this article as soon as new figures or guidance are released.

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