New Jersey 2022-2023 Regular Session

New Jersey Assembly Bill A3858

Introduced
5/9/22  

Caption

Revises gross income tax credit for child and dependent care expenses.

Impact

The legislative changes proposed by A3858 will significantly affect how taxpayers calculate and claim their childcare tax credits. By raising income limits for eligibility, more families will now qualify for the credit. This adjustment is aimed at addressing the financial burdens associated with childcare, emphasizing support for lower-income families. However, the nonrefundable nature of the credit means that any unused credit will not result in a refund, which may limit the benefit’s effectiveness for those who do not have sufficient tax liability.

Summary

Assembly Bill A3858 revises the New Jersey gross income tax credit available for child and dependent care expenses. The bill is intended to provide financial relief for families by enhancing the credit available to residents with a taxable income of $150,000 or less. The primary revisions include making the credit nonrefundable, thereby limiting its availability strictly to taxpayers with actual tax liability. It also establishes a cap on the maximum credit amount, setting it at $1,000 for one qualifying individual and $2,000 for multiple dependents, which can help offset the costs of childcare for eligible families.

Contention

There are points of contention surrounding the introduction of A3858, particularly regarding the nonrefundable aspect of the credit. Critics argue that while expanding eligibility may assist more families, the shift to a nonrefundable credit could disadvantage those with lower incomes who may need financial assistance the most yet do not have a tax liability. As the debate continues, stakeholders must weigh the potential benefits of increased access to the credit against the limitations imposed by its nonrefundable status.

Companion Bills

NJ S2058

Same As Revises gross income tax credit for child and dependent care expenses by expanding income eligibility and increasing credit.

Previously Filed As

NJ S2058

Revises gross income tax credit for child and dependent care expenses by expanding income eligibility and increasing credit.

NJ S1544

Revises gross income tax credit for child and dependent care expenses by expanding income eligibility and increasing credit.

NJ S4028

Expands eligibility for State gross income tax credit for child and dependent care expenses and increases amount of credit.

NJ S1482

Expands eligibility for State gross income tax credit for child and dependent care expenses and increases amount of credit.

NJ A1823

Allows gross income tax credit for portion of certain child care expenses.

NJ S742

Allows gross income tax credit for portion of certain child care expenses.

NJ A1602

Allows gross income tax credit for portion of certain child care expenses.

NJ A2243

Allows gross income tax credit for certain child care staff and registered family day care providers.

NJ A5887

Provides gross income tax credit for certain homeschooling expenses incurred by parent or guardian with increased credit for taxpayers homeschooling child or dependent with special needs.

NJ A1530

Provides gross income tax credit for certain homeschooling expenses incurred by parent or guardian with increased credit for taxpayers homeschooling child or dependent with special needs.

Similar Bills

CA AB1081

After School Education and Safety Program: funding: authorized purposes.

CA AB1051

Education finance: state special schools and diagnostic centers.

CA SB1203

School safety: lockdown training.

CA AB2434

County government: allocation of state funds.

CA SB527

Education finance: local control funding formula: home-to-school transportation: cost-of-living adjustment.

CA AB898

Criminal records: automatic conviction record relief.

NJ S1199

Creates new $100 assessment for convictions of certain sexual offenses to fund counseling for victims and their families; establishes Sexual Offender Victim Counseling Fund.

CA AB1391

Education finance: transitional kindergarten: funding for basic aid school districts and necessary small schools.