Singleton Bill To Make More Families Eligible For Child Care Tax Credit Signed Into Law

TRENTON, NJ — As part of an effort to help working families recover from the economic impacts of COVID-19, Governor Phil Murphy on Friday signed legislation (S4065/A6071) that will make significantly more New Jersey families eligible for the state’s Child and Dependent Care Tax Credit. The legislation will make taxpayers with incomes of $150,000 or less per year who incur expenses for childcare and other household expenses eligible for the credit for starting in tax year 2021. Under current law, only taxpayers with incomes of to $60,000 or less are eligible. The expanded state credit is based on the federal credit which underwent a significant expansion for tax year 2021 through the American Rescue Plan.

“The COVID-19 pandemic led many working parents—and working mothers in particular—to leave the workforce due to childcare challenges,” said Governor Murphy. “This legislation will help ensure affordable access to childcare, a critical part of getting hardworking New Jerseyans back into the workforce and reversing the ‘she-cession’ caused by the pandemic.”

The bill also revises the Child and Dependent Care Tax Credit so it is refundable in 2021 and 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. 

The legislation was sponsored by state Senators Dawn Addiego and Troy Singleton, and Assemblymembers Gabriela Mosquera, Roy Frieman, Lisa Swain, and Britnee Timberlake.

“In 2018, I sponsored the original legislation to off-set the heavy burden of payroll taxes on low and moderate income workers, all of whom have had to shrink their family budgets,” said Senator Singleton, who represents Bordentown and Fieldsboro in the Legislature. “This will put us more in line with the new federal child care tax credit and expand the number of New Jerseyans who are eligible. We need to make New Jersey more affordable for our families, and this is a great way do so.”

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