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Line a baking sheet with parchment paper; set aside.
Butter the sides of a 2-quart heavy saucepan. In the saucepan heat 1 cup butter over medium heat until melted. Add sugar, water and corn syrup. Cook and stir over medium-high heat until mixture comes to a boil. Clip a candy thermometer to side of pan. Reduce heat to medium; continue boiling at a moderate, steady rate, stirring frequently, until thermometer registers 290°F, soft-crack stage (about 15 minutes). Adjust heat as necessary to maintain a steady boil. Watch syrup carefully after it reaches 280°F to prevent scorching. Remove saucepan from heat; remove thermometer. Stir in vanilla.
Pour candy onto the prepared baking sheet, spreading quickly to an even thickness of about 1/4 inch. (Toffee will not cover entire surface of baking sheet.) Let stand for 2 to 3 minutes or just until set.
Sprinkle with chocolate chips. Let stand for 1 to 2 minutes or until chocolate is softened. Spread chocolate over candy. Chill about 20 minutes or until candy is firm. Break into about 2-inch pieces.