Personal income taxes: working families child care tax credit.
Impact
The modifications specified in AB2023 are intended to directly support lower-income households by granting them access to cash payments when their allowable tax credits exceed their actual tax liability. This adjustment is particularly relevant for families who rely on child care services to enable working parents to engage in gainful employment. By offering direct payments rather than solely tax credits, the bill seeks to alleviate some of the financial burdens associated with child care, thereby impacting family financial security and promoting workforce participation.
Summary
Assembly Bill 2023, introduced by Assembly Member Caballero, focuses on modifying the personal income tax law to enhance the Working Families Child Care Tax Credit. This amendment permits taxpayers eligible for this credit, particularly those with household and dependent care expenses necessary for employment, to receive payments exceeding the allowable credit amount if it surpasses their tax liability, effective for taxable years beginning on or after January 1, 2019, through January 1, 2024. The bill aims to provide financial support to working families, recognizing the importance of accessible and affordable child care in maintaining employment and economic stability.
Sentiment
Overall sentiment surrounding AB2023 appears to be positive, particularly among proponents who advocate for enhanced support for working families and better access to child care. Supporters view this legislation as a significant step towards recognizing the challenges faced by low-income families in covering child care costs. However, there may be concerns among opponents regarding the long-term financial implications of such tax credits and whether they create sustainable solutions for funding child care at scale.
Contention
Notable points of contention may arise from the potential fiscal impact of extending these tax credits and direct payments. Critics might argue that while the intent is commendable, the potential increase in budgetary allocations required for these credits could pose challenges for future state funding. Additionally, there may be discussions regarding the effectiveness of tax credits and direct payments in addressing the broader systemic issues related to child care accessibility and affordability, pushing for alternative or complementary reforms.
To amend the Internal Revenue Code of 1986 to provide a tax credit for expenses for household and elder care services necessary for gainful employment.