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Bill

A 5340

Provides gross income tax credit to qualified family caregivers for care and support expenses incurred for qualifying family members.

2026-2027 Regular Session Introduced by Brian Bergen

A5340 creates a refundable New Jersey gross income tax credit for qualified family caregivers to offset eligible care expenses, up to $3,000 ($5,000 for veterans or disabled relati

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Bill Summary · A 5340

Overview

  • Bill: Assembly No. 5340 (A5340)
  • Session: 222 (New Jersey)
  • Sponsor: Assemblyman Brian Bergen
  • Committee: Introduced June 28, 2026
  • Jurisdiction: New Jersey
  • Purpose: Establish a gross income tax credit for qualified family caregivers to offset care and support expenses for qualifying family members.

Main purpose and intent

A5340 creates a refundable gross income tax credit for individuals who provide care and support to certain qualifying family members. The goal is to reduce the financial burden on family members who furnish in-home care or related supports to relatives who are older adults, veterans, or individuals with disabilities, by offering a credit against New Jersey gross income tax.

Key provisions and changes

  • Credit amount
    • Up to $3,000 per taxable year for qualified care and support expenses.
    • Up to $5,000 per taxable year if the qualifying family member is a veteran or an individual with a disability.
  • Eligible taxpayers
    • A “qualified family caregiver” who is a New Jersey resident providing care and support to a “qualifying family member.”
  • Qualifying family member
    • Must be a relative of the caregiver, reside with the caregiver in the same household, and be 62 years or older, a veteran, or an individual with a disability.
    • The bill defines “relative” broadly to include many family relationships and also any person who has co-resided with the caregiver for at least 12 consecutive months prior to the tax year.
  • Qualified care and support expenses
    • Include expenses for: health care equipment or assistive devices, home health agency services, adult day care, companionship, personal care attendant services, homemaker services, respite care, home modification services, transportation to medical care or care services, and services necessary for two or more activities of daily living.
    • Covers purchases or leases of tangible personal property and services necessary to allow the qualifying family member to reside with the caregiver.
    • Excludes expenses reimbursed by insurance or by a State or federal program.
  • Documentation and substantiation
    • Taxpayers must attach documentation to tax returns verifying qualified expenses, including itemized receipts, proof of payment, home modification details, medical necessity certification, proof of co-residency (e.g., caregiver log or affidavit), and any other director-required materials to prevent fraud.
  • Coordinate with other tax benefits
    • The credit may be claimed in addition to:
    • The qualifying dependent deduction for the qualifying family member.
    • The existing veteran care credit, if applicable.
  • Business rules for multiple caregivers
    • If more than one caregiver provides care for the same qualifying family member, the total credit claimed by all caregivers cannot exceed $3,000 (or $5,000 for veterans/disabled) in a given year.
  • Refundability and timing
    • The credit is refundable; if it reduces tax liability below zero, the remaining amount is refunded as an overpayment of tax (without interest).
    • A caregiver is eligible for the refundable credit even if their gross income is below the statutory minimum subject to tax.
  • Administration and definitions
    • “Director” refers to the Director of the Division of Taxation.
    • Clearly defines disability, veteran, and other key terms for eligibility.
  • Effective date
    • Effective immediately; applies to taxable years beginning on or after January 1 following enactment.

Who/what is affected

  • Qualified family caregivers (resident individuals of New Jersey) who pay or incur qualified care and support expenses for qualifying family members.
  • Qualifying family members (relatives who reside with the caregiver and are 62+, veterans, or individuals with disabilities).
  • Tax administration and filing processes for New Jersey gross income tax, including documentation requirements and coordination with existing tax credits (dependent deduction and veteran care credit).

Procedural and timeline aspects

  • Effective date: Immediate enactment; applies to taxable years beginning after January 1 next following enactment.
  • Administration: The bill empowers the Director of the Division of Taxation to prescribe forms and procedures for applying for the credit and for substantiating expenses, including refund procedures for overpayments.
  • Policy safeguards: Documentation and fraud-prevention provisions are included; the credit is capped per family member and per year when multiple caregivers are involved.

Potential impacts

  • Financial relief for families providing in-home or community-based care to older adults, veterans, and disabled relatives.
  • Encourages formal documentation of caregiving expenses.
  • Could increase eligibility opportunities for caregivers with incomes below the traditional tax threshold due to refundability.
  • Administrative requirements may impose documentation burdens on taxpayers and the tax office to verify eligibility and prevent fraud.

This summary highlights the bill’s core elements, its scope, and how it would function in practice for qualifying taxpayers.

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

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