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Bill

AK

Bill

A 1602

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

2024-2025 Regular Session Introduced by Andrea Katz

New Jersey bill creates a gross income tax credit for child care expenses to reduce tax burden on working families with dependent care costs.

Introduced in the Assembly, Referred to Assembly Children, Families and Food Security Committee
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Bill Summary · A 1602

Legislative bill overview

Bill A 1602 proposes to create a gross income tax credit for New Jersey taxpayers who incur child care expenses. The credit would apply to a portion of qualifying child care costs, effectively reducing the taxable income or tax liability of eligible families. This is a tax relief measure designed to help offset the financial burden of child care.

Why is this important

Child care represents one of the largest household expenses for working families, often consuming 10-20% of household income. A tax credit directly reduces what families owe in taxes, providing financial relief that can improve household budgeting and potentially incentivize workforce participation, particularly among secondary earners. This addresses a significant cost barrier that many New Jersey families face.

Potential points of contention

  • Income eligibility thresholds - The bill doesn't specify income limits, raising questions about whether wealthy families would benefit equally or if the credit should be phased out at higher incomes
  • Definition of "qualifying" expenses - Unclear which child care arrangements qualify (licensed facilities only, family care, nannies, after-school programs), potentially creating disputes about coverage
  • Revenue impact and funding - The cost to the state budget isn't specified; lawmakers will debate whether this is fiscally sustainable or requires offsetting revenue measures
  • Equity concerns - Families unable to afford child care upfront may not benefit if the credit only applies at tax time, and those using informal care arrangements may face barriers to claiming it

Compiled from official sources — confirm details with the bill’s official record.

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