Toast Payroll: Vermont Child Care Tax

What is the new Vermont Child Care tax and how does Toast Payroll handle it?

On July 1st, 2024, Vermont will begin collecting payroll taxes for a child care initiative called the Child Care Contribution special fund. This tax will be automatically withheld from applicable employees at rate of .11% and applicable employers at a rate of .33%.

This change requires no action on your part. The tax is applied to payrolls whose check date is after July 1st. You can review the amounts by reading the . You'll also see the amounts reflected in the Estimated Withdrawal tile of the of payroll.

Some items of note:

• Reporting and filing for this tax is included with withholding filing. Additionally, this tax follows the same payment frequency of the Vermont state income withholding (SIT) tax.
  • For these reasons, this tax will not appear on the since all the EIN information is the same as Vermont SIT.
• There is no cap on the withholding amount.
• Vermont does allow for employers to assume the entire .44% rate, but at this time, the Toast Payroll tax system only allows for the splitting of the tax between employees and employers at the rates stated above.

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for advice.