ASSEMBLY, No. 2983

STATE OF NEW JERSEY

INTRODUCED MAY 12, 1997

By Assemblymen GEIST, TALARICO and Weingarten

An Act providing a gross income tax credit for child and dependent care expenses and supplementing chapter 4 of Title 54A of the New Jersey Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Each taxpayer who is entitled to claim a credit for child and dependent care expenses on the federal individual income tax return pursuant to section 21 of the federal Internal Revenue Code of 1986 (26 U.S.C.§ 21), shall be entitled to a credit for child and dependent care expenses against the State tax otherwise due under P.L.1976, c.47 (C.54A:1-1 et seq.). The credit allowable under this section shall be an amount equal to 50% of the maximum credit allowed for federal tax purposes.

    2. The Director of the Division of Taxation in the Department of the Treasury shall adopt, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary to effectuate the provisions of this act.

    3. This act shall take effect immediately and shall apply to taxable years ending after December 31, 1996.

STATEMENT

    This bill provides a taxpayer who qualifies to claim a child and dependent care expense credit on the federal individual tax return with a similar credit against the New Jersey gross income tax, in an amount equal to 50% of the federal credit. Currently, a taxpayer cannot deduct expenses from New Jersey gross income for child or dependent care.

Permits tax credit against gross income tax for child and dependent care expenses.