Bill > A06176

This bill establishes the New York State Early Childcare Savings Program, which creates a tax-advantaged savings account system designed to help New York residents save for childcare expenses. The program allows account owners to open savings accounts specifically for paying qualified early childcare expenses, with several key features: individuals can contribute up to $5,000 (or $10,000 for joint filers) annually and receive a tax deduction, funds can be used for licensed childcare centers, family daycare homes, and afterschool programs, and withdrawals used for qualified childcare expenses are not taxed. The program is managed by the state comptroller, who will select financial organizations to serve as account depositories and managers. If an account owner makes a non-qualified withdrawal (using funds for purposes other than childcare), they will be required to pay taxes on the entire account's earnings and incur a 10% state penalty. The program includes provisions for waiving penalties in certain circumstances like employment relocation, unforeseeable emergencies, military service, or death. Importantly, the bill emphasizes that the state does not guarantee investment returns or account performance, and participation does not guarantee admission to any specific childcare program.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/A6176