Vermont Child Care Contribution Tax

There are three scenarios:

1. The Employer pays all 0.44% payroll tax on employee wages; the Employee pays 0%.
2. The Employer pays 0.33% payroll tax on employee wages; the Employee pays 0.11%. Self-Employed Individuals would use this option.
3. The Employer pays 0.XX% payroll tax on employee wages; the Employee pays <=0.11%. The total of both should be 0.44%.

 NOTE: Based on VT CCC tax requirements, the maximum employee contribution is 0.11%. 

Note in formulas: "For proper withholding, enter the percentage the Employee will contribute towards the Child Care Contribution tax under Maintain, Employees in the Special 3 Additional Withholding box.  For example, if the Employee will withhold 0.11%, enter 0.11 in the Special 3 Additional Withholding field."

https://tax.vermont.gov/business/child-care-contribution

 The VT CCC tax formulas will be included in the July 2024 tax update. When available, this update can be downloaded from the Sage 50—U.S. Edition: Download Portal.

Step 1: Set up the employee contribution

1. Go to Maintain > Payroll > Employee Defaults.
2. Select the Employee Fields tab.
3. In the next available Field Name, type VT_EE.
4. Select the appropriate G/L Account and place a check mark in the Calc box.
5. In the Formula drop-down, select VTCCC EE.
6. Click the Adjust arrow to the right of this line to open the Calculate Adjusted Gross screen.
7. Place a check mark in the Use column next to the Gross field. Click OK and then click Yes.

Step 2: Set up the company contribution

1. In the Employee Defaults, select the Company Fields tab.
2. In the next available Field Name, type VT_ER.
3. Select the appropriate Liability and Expense accounts, and place a check mark in the Calc box.
4. In the Formula drop-down, select VTCCC ER.
5. Click the Adjust arrow to the right of this line to open the Calculate Adjusted Gross screen.
6. Place a check mark in the Use column next to the Gross field. Click OK and then click Yes.
7. Click OK to save the Employee Defaults.

Step 3: Enter the contribution rate in Maintain Employees

1. Go to Maintain > Employees/Sales Reps.
2. Select an employee from the list.
3. Select the Withholding Info tab.
4. On the line for Special 3 in the Addl Withholding field, enter the employee's contribution rate (maximum of 0.11).
5. Click Save.
6. Perform the above for all employees subject to the Child Care Contribution tax.