Bill > S4065

Introduced Session

This bill revises the State's child and dependent care tax credit, which is based on the federal credit and is for taxpayers who incur expenses for household services and the care of a child or dependent to enable the taxpayer to be employed. The bill revises the credit so that it will be refundable. This means that a taxpayer could receive a cash refund if the credit amount is in excess of their gross income tax liability. Under current law, the credit is nonrefundable, and therefore, if the credit is in excess of the taxpayer's gross income tax liability then the taxpayer may not be able to claim the full tax credit amount. The bill also revises the income requirements for the credit so that taxpayers who have New Jersey taxable income of $150,000 or less for the tax year can claim the credit compared to $60,000 or less under current law. In addition, the bill removes the current caps of $500 for employment-related expenses paid by the taxpayer for one child or dependent and $1,000 for employment-related expenses paid by the taxpayer for two or more children or dependents. Finally, the bill revises the tax credit's taxable income eligibility requirements as follows: not over $30,000 to receive a New Jersey tax credit equal to 50 percent of the federal credit; over $30,000 but not over $60,000 to receive 40 percent of the federal credit; over $60,000 but not over $90,000 to receive 30 percent of the federal credit; over $90,000 but not over $120,000 to receive 20 percent of the federal credit; and over $120,000 but not over $150,000 to receive 10 percent of the federal credit.

AI Summary

Committee Categories

Dawn Addiego (D)*,  Troy Singleton (D)*,  Daniel Benson (D),  Shirley Turner (D),  Valerie Vainieri Huttle (D), 

Approved P.L.2021, c.308. (on 12/03/2021)

Official Document