STATE OF NEW JERSEY
PRE-FILED FOR INTRODUCTION IN THE 2016 SESSION
Assemblywoman HOLLY SCHEPISI
District 39 (Bergen and Passaic)
Assemblyman TROY SINGLETON
District 7 (Burlington)
Assemblywoman ANNETTE QUIJANO
District 20 (Union)
Assemblywoman NANCY F. MUNOZ
District 21 (Morris, Somerset and Union)
Assemblymen Conaway and Prieto
Provides a corporation business tax credit for day care center support benefiting children of employees.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act allowing a credit against the corporation business tax for certain child care support supplementing P.L.1945, c.162 (C.54:10A-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer shall be allowed a credit, to be computed as provided in this section, against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5). The credit shall be an amount equal to
(1) 25% of the amount paid or incurred by the taxpayer for the operation by the taxpayer of a day care center for children of the taxpayer's employees;
(2) 25% of the amount paid or incurred by the taxpayer for the operation of a day care center for children of employees in cooperation with one or more persons required to pay State taxes;
(3) Up to 25% of the amount paid or incurred by the taxpayer for child care services (a) under a dependent care assistance program which amount is excludable from an employee's gross income for federal income tax purposes pursuant to section 129 of the federal Internal Revenue Code of 1986, 26 U.S.C.§129 or (b) under a flexible benefit account or cafeteria plan which amount is excludable from an employee's gross income for federal income tax purposes pursuant to section 125 of the federal Internal Revenue Code of 1986, 26 U.S.C.§125;
(4) 25% of the amount paid or incurred by the taxpayer as a grant to a day care center to reimburse that center for services provided to children of an employee of the taxpayer, or
(5) 25% of the amount paid or incurred by the taxpayer to an unaffiliated third party for use in the maintenance expense of a day care center by that third party that serves the children of the taxpayer's employees.
b. As used in this section, "a day care center for children" means a community-based, employer-based, or employer-supported facility which is a licensed, child care center.
c. The tax imposed for a fiscal or calendar accounting year pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall first be reduced by the amount of any credit allowed pursuant to section 19 of P.L.1983, c.303 (C.52:27H-78), and then by any credit allowed pursuant to section 42 of P.L.1987, c.102 (C.54:10A-5.3), prior to applying any credits allowable pursuant to this section. Credits allowable pursuant to this section shall be applied in the order of the credits' tax years. The amount of the credits applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), for an accounting year shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of tax year credit otherwise allowable under this section which cannot be applied for the tax year due to the limitations of this subsection may be carried over, if necessary, to the ten accounting years following a credit's tax year.
d. When filing a tax return that includes a claim for a credit pursuant to this section, the taxpayer shall include a certified statement that the amount claimed was used exclusively for children's day care center purposes and shall identify the center.
2. This act shall take effect immediately and apply to privilege periods beginning on or after July 1 next following enactment.
This bill provides for a tax credit under the corporation business tax for certain corporate taxpayer's support of a licensed child care service for their employees' children or certain other payments for child care services for children of employees. The credit is equal to 25% of expenses incurred. The credit may be taken in cooperation with other businesses involved in the same child care center service. This provision is intended to act as an incentive for smaller businesses to provide child care for their employees.