Bill Introduced to Provide Unpaid Caregivers With Tax Credit

A group of bipartisan senators have proposed a bill that would provide Vermont’s unpaid caregivers with a tax credit.

The bill, which is sponsored by Sen. Ruth Hardy (D-Addison), would allow eligible residents to claim up to $2,500 annually for providing at least 20 hours per week of care to a family member, friend or neighbor with a disability or health condition who needs assistance.

“All of us at some point in our life have to either care for someone or be cared for ourselves,” said Hardy. “I want to ensure that these Vermonters get the support they need.”

S.51 — which has nine sponsors, both Democrats and Republicans — was brought to the Senate Finance Committee on Wednesday. Lawmakers seemed interested in its potential, and discussed potential financial structures for moving the tax incentive forward. 

Hardy, who teaches a gender and public policy class at Middlebury College, said some of the inspiration came from her students, who introduced a version of the caretaker credit bill in a mock senate session last fall.

Caroline Hoff, a 20-year-old Middlebury student and the chair of the finance committee for the mock senate, said the class inspired her to consider a career in policy-making. She’s now working with Hardy outside of class. 

“We think of tax credits as giving people back money,” Hoff said. “But if you consider that this monetary support could potentially allow caregivers to stay in the workforce, this credit could in turn help the economy.”

The credit-for-care incentive has already gained momentum in other states. As of 2024, 27 states and the District of Columbia provide some form of their own child and dependent care tax credit.

A caretaking tax credit could be especially impactful in Vermont, which has one of the oldest populations in the country, said Hardy. She highlighted the disproportionate toll that caregiving takes on women — particularly older women.

A dire shortage of health care workers in the state makes the unpaid work by caregivers crucial. Without support, these unpaid caregivers risk mental and physical health issues.

The credit would function much like the Vermont Child Tax Credit, which provides financial support to families with young children. The details of who would qualify have yet to be fleshed out.

“I think it’s important to have a bill like this on the table as part of the conversation we’re having around tax relief,” Hardy said. “I would like us to seriously consider this as a population that we need to really help in Vermont.”