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Read. Follow. Verify.Vermont creates family caregiver income tax credit up to $2,500
Last action · January 9, 2026: Read 1st time & referred to Committee on FinanceSponsors: Ruth Hardy and 6 others
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What This Bill Would Do
Vermont establishes a refundable income tax credit for resident and part-year resident family caregivers equal to 30 percent of qualified expenses, capped at $2,500 per taxable year, effective retroactively to January 1, 2026. The credit amount phases out by $50 for each $1,000 that a taxpayer's exceeds $125,000. Additionally, households claiming the credit are exempt from including the care recipient's income in household income calculations for property tax credits.
Family caregivers in Vermont spending money on care-related goods, services, and lost wages can recover up to $2,500 annually through state income taxes, with eligibility beginning for taxable years starting on or after January 1, 2026.
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
Family caregivers in Vermont
Taxpayers who provide care to eligible relatives can claim a refundable income tax credit up to $2,500 for qualified care expenses.
Individuals with long-term care needs
Care recipients who are family members may have their income excluded from household income calculations for property tax credit purposes if a caregiver claims the credit for them.
Key Facts
- Establishes a refundable income tax credit for resident or part-year resident family caregivers against Vermont income tax.
- The credit equals 30 percent of qualified expenses paid by the taxpayer during the taxable year for an individual with long-term care needs.
- Sets the maximum allowable credit per taxable year at $2,500.00.
- Reduces the credit amount by $50.00 for each $1,000.00 by which an individual's adjusted gross income exceeds $125,000.00.
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- Requires the maximum allowable credit to be adjusted annually for inflation starting in taxable year 2027 using the Consumer Price Index for All Urban Consumers.
- Defines an individual with long-term care needs as someone at least 14 years old, related to the caregiver, possessing a medically diagnosed condition, not living in a licensed nursing or residential care home, and requiring substantial assistance with activities of daily living or supervision due to cognitive impairment.
- Includes qualified expenses such as respite care, adult daycare, counseling, support groups, training, employer-verified lost wages for unpaid care time, travel costs, and assistive technologies.
- Excludes a care recipient from household income calculations for property tax credit purposes if a family caregiver credit was claimed for them in the most recent tax year.
- Takes effect retroactively on January 1, 2026, and applies to taxable years beginning on and after January 1, 2026.
Frequently Asked Questions
Who is eligible to claim the Vermont family caregiver tax credit?
What is the maximum credit amount a taxpayer can receive?
Does income level affect the size of the tax credit?
Are lost wages eligible for the caregiver tax credit?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
Currently in committee. The next step in the legislative lifecycle is Floor Vote.
Procedural history
1 action- Jan 9, 2026SenateIntroducedRead 1st time & referred to Committee on Finance
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Integration of Caregiver Support into Property Tax Exclusions
The bill links income tax credits for caregivers directly to property tax credit household income calculations, creating a cross-tax benefit.
Connected Entities
Sources
legislature.vermont.gov
Analysis Score
0–100- Significance65How much this matters to a regular citizen
- Controversy20Intensity of disagreement among stakeholders
- Entertainment5Compellingness for a non-policy-wonk reader
- Buzz35Current news / social attention level
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