Bill Text: NJ S2740 | 2014-2015 | Regular Session | Introduced
Bill Title: Provides gross income tax deduction for certain child and dependent care expenses.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-02-09 - Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee [S2740 Detail]
Download: New_Jersey-2014-S2740-Introduced.html
Sponsored by:
Senator ANTHONY R. BUCCO
District 25 (Morris and Somerset)
SYNOPSIS
Provides gross income tax deduction for certain child and dependent care expenses.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a gross income tax deduction for certain expenses for child and dependent care necessary for taxpayer's employment 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 taxpayer shall be allowed to deduct from the taxpayer's gross income for a taxable year, an amount equal to the employment-related expenses paid during the taxable year for household and dependent care services allowed in determining the credit under section 21 of the federal Internal Revenue Code (26 U.S.C. s.21), if any, notwithstanding the dollar limit on creditable expenses of subsection (c) of 26 U.S.C. s.21, up to a maximum deduction of $4,800 for expenses paid for one qualifying individual with respect to the taxpayer for the taxable year, and a maximum deduction of $9,600 for expenses paid for two or more qualifying individuals with respect to the taxpayer for the taxable year.
b. Married couples shall file a joint return in order to claim the deduction provided by this section.
c. A taxpayer shall not be allowed to claim a deduction provided by this section for expenses incurred for the care of a qualifying individual for a taxable year if the taxpayer also claims a deduction for that individual pursuant to paragraphs 2 or 6 of subsection (b) of N.J.S.54A:3-1 for the taxable year.
2. This act shall take effect immediately and apply to taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill provides a gross income tax deduction for certain expenses incurred by a taxpayer for the care of a child or dependent when necessary for the taxpayer's employment. Deductible expenses are those that qualify for purposes of calculating the income tax credit under section 21 of the federal Internal Revenue Code (26 U.S.C. s.21). This bill allows a taxpayer to deduct up to $4,800 in expenses paid for one child or dependent, or up to $9,600 in expenses paid for two or more children or dependents.
This bill refers to the provisions of the federal income tax credit and uses the terms "employment-related expenses" and "qualifying individuals" as defined therein. Qualifying individuals include a taxpayer's son or daughter under the age of 13, a spouse or other dependent relative of the taxpayer who is physically or mentally incapable of caring for himself or herself, and who lives with the taxpayer for more than half of the taxable year. The federal provision also sets out certain requirements for the care services, whether provided in or outside of the taxpayer's home. Although the federal provision limits creditable expenses at $3,000 for one qualifying individual, and $6,000 for two or more qualifying individuals, this bill allows taxpayers to deduct expenses that exceed those limits for New Jersey gross income tax purposes.
A taxpayer may claim either the deduction provided by this bill or a deduction provided by paragraphs 2 or 6 of subsection (b) of N.J.S.54A:3-1 with regard to a particular dependent or spouse who is a qualifying individual, but not both for a taxable year.
This bill allows a deduction of child and dependent care expenses paid that are creditable for federal income tax purposes, up to a maximum deduction of $4,800 or $9,600 as specified. This assists parents and caregivers with the considerable costs of child or dependent care by allowing a gross income tax deduction for expenses incurred that are necessary for the taxpayer's gainful employment.
