ASSEMBLY, No. 1645

 

STATE OF NEW JERSEY

 

INTRODUCED MARCH 4, 1996

 

 

By Assemblyman COHEN

 

 

An Act allowing a credit against the corporation business tax for certain adult day care center support to the benefit of employees, 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) The amount paid or incurred by the taxpayer for the establishment, construction and operation by the taxpayer of an adult day care center that serves the spouses, parents, and elderly relatives of the taxpayer's employees, retired employees of the taxpayer and spouses, parents and elderly relatives of those retired employees;

    (2) The amount paid or incurred by the taxpayer for the operation of an adult day care center in cooperation with one or more persons required to pay State taxes that serves the spouses, parents and elderly relatives of those taxpayers' employees, retired employees of those taxpayers and spouses, parents and elderly relatives of those retired employees of those taxpayers;

    (3) Up to 10% of the amount paid or incurred by the taxpayer for adult day care center 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) The amount paid or incurred by the taxpayer as a grant to an adult day care center to reimburse that center for services provided to a spouse, parent or elderly relative of an employee of the taxpayer, a retired employee of the taxpayer or the spouse, parent or elderly relative of a retired employee of the taxpayer; or

    (5) The amount paid or incurred by the taxpayer as a donation to an unaffiliated third party for use in the construction, expansion or maintenance expense of an adult day care center by that third party that serves the spouses, parents and elderly relatives of the taxpayer's employees, retired employees of the taxpayer and spouses, parents and elderly relatives of those retired employees, whether or not the donation qualifies as a charitable contribution for which the taxpayer may claim a deduction from federal taxable income pursuant to section 170(b)(2) of the federal Internal Revenue Code, 26 U.S.C. §170.

    b. As used in this section, "adult day care center" means a community-based or employer-based group program designed to meet the needs of functionally or cognitively impaired adults through an individual plan of care structured to provide a variety of health, social and related support services including related transportation services, offered in a protective setting in this State during any part of a day but less than 24 hours in a day.

    c. The tax imposed for a fiscal or calendar accounting year pursuant to section 5 of P.L.1945, c.162, 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, 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. 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 adult day care center purposes and shall identify the center.

 

    2. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill provides a tax credit under the corporation business tax for certain corporation taxpayer's support of adult day care centers that serve the corporation's retired employees and their spouses, parents and elderly relatives and the spouses, parents and elderly relatives of the employees. Corporation taxpayer support eligible for the tax credit includes: the expenses of establishing, constructing and operating an adult day care center by the corporation taxpayer; operating expenses of a center run in cooperation with one or more other corporation taxpayers; payments for adult day care center services made pursuant to certain employee benefit programs; grants similar to scholarships to reimburse adult day care center charges for eligible employees, retirees and their relations; and capital construction, expansion and maintenance expense donations made to unaffiliated, third party sponsored adult day care centers. The adult day care center tax credit allowed in any year is limited to 50% of the corporation business tax liability otherwise due and may not reduce tax liability to less than the statutory minimum. The amount of any unused tax credit in a tax year resulting from these limitations may be carried over to any of the next ten tax years. The credit allowed for operating expenses of a center run in cooperation with one or more other corporation taxpayers will provide an incentive for owners of small businesses to form consortiums with other small businesses to fund the operations of a center.

    Adult day care may include both social day care and medical day care programs. Social day care generally involves few if any nursing and medical staff and minimum personal care and may be found sharing sites with senior and other community centers. Medical day care involves nurses and other health care professionals on site, personal care and rehabilitative services and lower staff-to-client ratios than social day care. Services directly provided through adult day care include social services, nursing, recreational activities, exercises, arts and crafts, music, reality therapy and dressing, grooming and toileting assistance. Adult day care centers may also either contract for or directly provide meals and transportation and may also provide or contract for physical, speech and occupational therapies and diet counseling. Adult day care centers are also likely to make referrals for physician, psychiatric, podiatric and dental services for their clients.

    Adult day care provides key support to elderly and disabled adults as well as to their family caregivers. A growing segment of the State's working population is responsible for the dual burden of providing care for an elderly or disabled spouse, parent or relative in a home setting and performing the full-time responsibilities of the workplace. As employees and caregivers, they must not only continue the caregiving but must also satisfy employer requirements for attendance, attention to work and productivity. An increasing number of employers are becoming more aware of the effect this dual burden on their employees has upon labor availability, absenteeism and productivity. Providing corporation business tax credits for adult day care services assisting employee caregiving responsibilities will provide a financial incentive to corporate employers to increase the availability of adult day care services that can alleviate the adult caregiving burdens on their workforce.

 

 

 

Provides corporation business tax credit for adult day care center support benefiting employees.