Vermont Child Care Contribution

Vermont Child Care Contribution (CCC) is an employer tax. However, employers can opt to share the cost with their employees.

The state defines the maximum employee/employer split. Employee wages earned in Vermont are subject to this tax.

When implementing this tax, there are some things you should consider.

• What is the employee eligibility criterion

• How to override the legislative rate

• How to override the employee/employer split

• How to opt out your organization

• How to opt out an employee

• How to cost CCC taxes

• What wage basis rules it follows

What is the employee eligibility criterion

The payroll process takes this tax for all people working in Vermont.

How to override the legislative rate

To override the tax withholding rate:

1. To change this tax at the payroll statutory unit (PSU) level, start the Legal Entity Calculation Cards task from your implementation project.

   Use Legal Reporting Unit Calculation Cards task to change this tax at the tax reporting unit (TRU) level.

   Settings at the TRU level override those at the PSU level.

2. In Component Groups, select the Vermont state regional node.

   Create it if it doesn't exist.

3. In Calculation Components, select State Miscellaneous.

   Create it if it doesn't exist.

4. Click Enterable Calculation Values on the Calculation Card.

5. Click Create.

6. Search for and select Child Care Contribution Rate, and set the appropriate value.

7. Save your work.

How to override the employee/employer split

By default, the employer contributes 100% of this tax and the employee 0%.

To change this split:

1. To change the percentages at the PSU level, start the Legal Entity Calculation Cards task from your implementation project.

   Use Legal Reporting Unit Calculation Cards task to change this tax at the TRU level.

2. In Component Groups, select the Vermont state regional node.

3. In Calculation Components, select State Miscellaneous.

4. Click Enterable Calculation Values on the Calculation Card.

5. Click Create.

6. Add these calculation components, and set the appropriate values for each.

   • Child Care Contribution Employer Percentage

   • Child Care Contribution Employee Percentage

   Enter each as a percentage, such as 75% as 75.

   The sum of both must equal 100%, and individual values can't exceed the state mandated maximum. Refer to the Vermont tax authority's website for info on the maximum employee contribution percentage.

7. Save your work.

How to opt out your organization

To opt out your organization:

1. To opt out at the PSU level, start the Legal Entity Calculation Cards task from your implementation project.

   To opt out at the TRU level, start the Legal Reporting Unit Calculation Cards task.

2. In Component Groups, choose the Vermont state regional node.

3. In Calculation Components, choose State Miscellaneous.

4. Select Enterable Calculation Values on the Calculation Card.

5. Click Create.

6. Search for and select Employer Tax Exemption.

7. In Value, select the appropriate exemption status.

   • Exempt from wage accumulation and tax withholding

   • Exempt from tax withholding

   • Not exempt

8. Save your work.

How to exclude an individual employee

To exclude an individual employee from this tax:

1. Open the person's Tax Withholding card for editing.

2. Open their Vermont regional component for editing.

3. In Withholding Exemption, set the appropriate exemption status.

   • Exempt from wage accumulation and tax withholding

   • Exempt from tax withholding

   • Not exempt

4. Save your work.

How to cost the tax

To process CCC taxes, cost these predefined elements using the Tax Calculated input value.

• State Miscellaneous Employer Liability

• State Miscellaneous Employee Tax

• State Miscellaneous Employee Tax Not Taken

What wage basis rules it follows

The Vermont CCC rules are predefined using the State Miscellaneous and Not Withholdable State Miscellaneous components for VT. You can view them with the Component Group Rules task. The rules are the same as the Vermont SIT withholding wage basis rules.