Bill > S05866

This bill establishes the New York State Early Childcare Savings Program, which creates a new type of savings account designed to help families save money for childcare expenses while receiving tax benefits. The program allows individuals to open early childcare savings accounts with financial organizations, with contributions limited to $100,000 per account and offering tax deductions of up to $5,000 for individuals or $10,000 for married couples filing jointly. Account owners can contribute cash to these accounts and withdraw funds for qualified childcare expenses at licensed day care centers, family day care homes, and after-school programs without incurring tax penalties. If funds are withdrawn for non-qualified purposes, the account owner will be taxed at their federal tax rate and incur an additional 10% state penalty on earnings. The program is managed by the comptroller, who will select financial organizations to serve as account depositories and oversee the program's implementation. The bill aims to help more residents stay in the workforce by providing a means to save for childcare and to create opportunities for children to receive quality childcare services. The program includes provisions for changing beneficiaries, transferring accounts, and waiving penalties under certain circumstances such as employment relocation, unforeseeable emergencies, military service, or death.

Government Affairs

https://www.nysenate.gov/legislation/bills/2025/S5866