diff --git a/.codecov.yml b/.codecov.yml
index 4d367445..9e522fc3 100644
--- a/.codecov.yml
+++ b/.codecov.yml
@@ -6,7 +6,7 @@ coverage:
   status:
     project:
       default:
-        target: 95%
+        target: 85%
     patch:
       default:
-        target: 95%
+        target: 90%
diff --git a/DEVELOPMENT.md b/DEVELOPMENT.md
index 2bc80c77..95b52c5a 100644
--- a/DEVELOPMENT.md
+++ b/DEVELOPMENT.md
@@ -73,3 +73,7 @@ To run specific tests, you can use the `-t` flag to match the name mentioned in
 # Run all tests in the 'Transaction Builder' describe block (test/e2e/transaction-builder/TransactionBuilder.test.ts)
 yarn test -t 'Transaction Builder'
 ```
+
+## Code Coverage
+
+New contributions have a code coverage target of 90%+. You can run `yarn test --coverage` to see the coverage report before submitting a PR.
diff --git a/packages/cashc/vitest.config.ts b/packages/cashc/vitest.config.ts
index 612242d3..94fbf30a 100644
--- a/packages/cashc/vitest.config.ts
+++ b/packages/cashc/vitest.config.ts
@@ -1,17 +1,17 @@
 import { defineConfig } from 'vitest/config';
 
 export default defineConfig({
-  root: './test',
   test: {
     environment: 'node',
+    include: ['test/**/*.{test,spec}.?(c|m)[jt]s?(x)'],
+    exclude: ['**/types/**'],
     globals: true,
     silent: 'passed-only',
-    include: ['**/*.{test,spec}.?(c|m)[jt]s?(x)'],
-    setupFiles: ['./vitest.setup.ts'],
-    exclude: ['**/types/**'],
     coverage: {
       provider: 'v8',
-      reporter: ['json-summary'],
+      include: ['src/**/*.ts'],
+      exclude: ['src/grammar/**/*.ts'],
     },
+    setupFiles: ['./vitest.setup.ts'],
   },
 });
diff --git a/packages/cashscript/vitest.config.ts b/packages/cashscript/vitest.config.ts
index bfe4161d..fdb63769 100644
--- a/packages/cashscript/vitest.config.ts
+++ b/packages/cashscript/vitest.config.ts
@@ -1,17 +1,17 @@
 import { defineConfig } from 'vitest/config';
 
 export default defineConfig({
-  root: './test',
   test: {
     environment: 'node',
-    include: ['**/*.{test,spec}.?(c|m)[jt]s?(x)'],
-    setupFiles: ['./vitest.setup.ts'],
+    include: ['test/**/*.{test,spec}.?(c|m)[jt]s?(x)'],
     exclude: ['**/types/**'],
-    testTimeout: 50000,
     globals: true,
     silent: 'passed-only',
     coverage: {
       provider: 'v8',
+      include: ['src/**/*.ts'],
     },
+    setupFiles: ['./vitest.setup.ts'],
+    testTimeout: 50000,
   },
 });
diff --git a/packages/cashscript/vitest.setup.ts b/packages/cashscript/vitest.setup.ts
index 99f0b047..62dd58ca 100644
--- a/packages/cashscript/vitest.setup.ts
+++ b/packages/cashscript/vitest.setup.ts
@@ -1,4 +1,4 @@
 import { inspect } from 'util';
-import '../src/test/TestExtensions.js';
+import './src/test/TestExtensions.js';
 
 inspect.defaultOptions.depth = 10;
diff --git a/packages/utils/vitest.config.ts b/packages/utils/vitest.config.ts
index f6a79460..03d8659b 100644
--- a/packages/utils/vitest.config.ts
+++ b/packages/utils/vitest.config.ts
@@ -1,14 +1,15 @@
 import { defineConfig } from 'vitest/config';
 
 export default defineConfig({
-  root: './test',
   test: {
     environment: 'node',
-    silent: 'passed-only',
+    include: ['test/**/*.{test,spec}.?(c|m)[jt]s?(x)'],
+    exclude: ['**/types/**'],
     globals: true,
+    silent: 'passed-only',
     coverage: {
       provider: 'v8',
-      reporter: ['json-summary'],
+      include: ['src/**/*.ts'],
     },
   },
 });