Bill Text: NJ A3750 | 2018-2019 | Regular Session | Introduced


Bill Title: Provides gross income tax credit for certain child care expenses incurred by grandparents.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Introduced - Dead) 2018-04-05 - Introduced, Referred to Assembly Women and Children Committee [A3750 Detail]

Download: New_Jersey-2018-A3750-Introduced.html

ASSEMBLY, No. 3750

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED APRIL 5, 2018

 


 

Sponsored by:

Assemblyman  ANTHONY M. BUCCO

District 25 (Morris and Somerset)

Assemblywoman  NANCY F. MUNOZ

District 21 (Morris, Somerset and Union)

Assemblywoman  ELIANA PINTOR MARIN

District 29 (Essex)

 

 

 

 

SYNOPSIS

     Provides gross income tax credit for certain child care expenses incurred by grandparents.

 

CURRENT VERSION OF TEXT

     As introduced.

 


An Act providing a gross income tax credit for certain expenses incurred by grandparents for child care and supplementing Title 54A of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a.  A resident taxpayer who does not qualify for a credit for child and dependent care expenses pursuant to section 21 of the federal Internal Revenue Code of 1986, 26 U.S.C. 21, for the care of one or more qualifying children shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. in amount not in excess of $500 for household expenses incurred during the taxable year for the care of a qualifying child who is not the child of the taxpayer.  

     b.    (1) "Qualifying child" means a son, daughter, stepson, or stepdaughter related by blood or law who is a dependent of a child of the taxpayer and is under the age of 13.

     (2)   "Household expenses" means costs paid by a resident taxpayer for the well-being and protection of a qualifying child at the resident taxpayer's permanent place of abode in this State, including but not limited to food, clothing, education, and transportation.

     c.     (1)  If the credit allowed pursuant to this section, together with any other payments, credits, deductions, and adjustments allowed by law, reduces a taxpayer's liability otherwise due for the taxable year pursuant to N.J.S.54A:1-1 et seq. to zero, the amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment of tax in accordance with N.J.S.54A:9-7; provided however, that subsection (f) of that section shall not apply.

     d.    The director may require a resident taxpayer to provide documentation of household expenses incurred for the care of a qualifying child.  The director shall determine the form and manner by which a resident taxpayer who is allowed a credit in accordance with subsection a. of this section shall apply for a refund of an overpayment of tax, and the time of the refund of the overpayment of tax.

 

     2.    This act shall take effect immediately and shall apply to taxable years beginning on or after January 1 next following the date of enactment.

 

 

STATEMENT

 

     This bill provides a gross income tax credit of up to $500 to taxpayers who pay or incur household expenses for the care of a qualifying child at the taxpayer's home if the child is a dependent of the taxpayer's child.  The purpose of this bill is to recognize and provide financial assistance to State residents who provide informal, uncompensated child care for their grandchildren or step-grandchildren, but do not qualify for the federal child care tax credit.

     The bill provides that to be allowed a credit a resident taxpayer who pays or incurs household expenses must have gross income that does not exceed an annual income limitation.  The bill specifies that a taxpayer must have a gross income that does not exceed $80,000.  The bill defines a "qualifying child" as a son, daughter, stepson, or stepdaughter related by blood or law who is a dependent of a child of the taxpayer and is under the age of 13.  The bill defines "household expenses" as costs paid by a resident taxpayer for the well-being and protection of a qualifying child at the resident taxpayer's permanent place of abode in this State, including but not limited to food, clothing, education, and transportation

     The bill provides that the credit is refundable:  the amount of any credit that reduces the taxpayer's tax liability to an amount less than zero is required to be refunded to the taxpayer as an overpayment of tax. 

       Current federal law allows taxpayers to claim a credit for employment-related expenses for the care of a qualifying child or dependent.  Employment-related expenses allow a taxpayer (and their spouse if filing jointly) to work or look for work and are for the care of a qualifying child.  However, it has become more common for retired persons to assist members of their families with child care through less formal arrangements.

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