SENATE, No. 359

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Senators BUBBA and CIESLA

An Act providing an exclusion under the gross income tax for employer-provider dependent care assistance, supplementing Title 54A of the New Jersey Statutes.

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

    1. Gross income shall not include amounts paid or incurred by the taxpayer's employer for dependent care assistance provided to the taxpayer if the amounts paid or incurred are excluded from federal taxable income for the taxable year pursuant to section 129 of the federal Internal Revenue Code of 1986, 26 U.S.C.§129.

    2. This act shall take effect immediately and apply to taxable years ending after December 31, 1994.

STATEMENT

    This bill provides gross income tax relief to working taxpayers supporting children and disabled dependents by allowing taxpayers to exclude from gross income the value of dependent care assistance services provided by the taxpayer's employer through a federally qualified employee benefits plan. A taxpayer may exclude up to $5,000 annually ($2,500 for a married taxpayer filing separately) of dependent care benefits provided by an employer to a dependent of the taxpayer under the age of 13 or to a disabled dependent of any age.

Provides a gross income tax exclusion for employer-provided dependent care assistance.