In 2024 Vermont introduced one of the newest state employer payroll taxes in the country: the Child Care Contribution (CCC), created by Act 76 to fund the state’s child care system. If you have employees in Vermont, here is exactly what it is and how it works.
This is general information, not tax advice. Confirm current details with the Vermont Department of Taxes.
The rate and the base
The Child Care Contribution is 0.44% of all wages subject to Vermont income tax withholding — with no wage cap, so it applies to every dollar of covered wages, not just the first several thousand. It is a straight percentage, unlike the experience-rated unemployment tax.
Who pays — and the optional employee split
The contribution is fundamentally the employer’s obligation: the employer owes the full 0.44%. However, an employer may choose to withhold up to a quarter of it — 0.11% — from the employee, and cover the remaining 0.33% itself. That is a per-employer choice. If the employer does not elect to withhold, it simply pays the entire 0.44% and nothing comes out of the employee’s check.
How it is filed
The CCC is remitted on the same schedule and through the same channel as Vermont income-tax withholding, and reported on the quarterly Withholding Reconciliation (Form WHT-436). In other words, it rides along with the withholding you are already filing for Vermont — there is no separate agency or account to set up.
How Payrollix handles it
Payrollix calculates the Child Care Contribution automatically for Vermont employees. By default the employer pays the full 0.44%; a single per-client setting turns on the 0.11% employee withholding if you elect it, and the split is applied on every check. Because it is small and new, it is exactly the kind of tax that is easy to miss by hand — so it is built in.
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