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Assembly Panel Clears Mosquera, Freiman, Swain, & Timberlake Measure to Revise Gross Income Tax Credit for Child & Dependent Care Expenses

(TRENTON) – To support working families in New Jersey, Assembly Democrats Gabriella Mosquera (D-Camden, Gloucester), Roy Freiman (D-Hunterdon, Mercer, Middlesex, Somerset), Lisa Swain (D-Bergen, Passaic), and Britnee N. Timberlake (D-Essex, Passaic) sponsor a measure to revise the New Jersey Child and Dependent Care Tax Credit.  The measure was approved by the Assembly Appropriations Committee on Monday.

The bill (A-6071) would:

  • Increase the income limit for the state-level Child and Dependent Care Tax Credit form $60,000 to $150,000
  • Remove the current caps of $500 for employment-related expenses paid by the taxpayer for one child or dependent and $1,000 for employment-related expenses paid by the taxpayer for two or more children or dependents; and
  • Make the credit refundable – a taxpayer would receive a cash refund if the Child and Dependent Care Tax Credit amount is in excess of their gross income tax liability.

The measure would also revise the tax credit’s taxable income eligibility requirements as follows:

  • 50% of the federal credit for those making up to $30,000 annually;
  • 40% of the federal credit for those making between $30,000 and $60,000;
  • 30% of the federal credit for those making between $60,000 and $90,000;
  • 20% of the federal credit for those making between $90,000 and $120,000; and
  • 10% of the federal credit for those making between $120,000 and $150,000.

Under the current law, residents are eligible for a credit against their New Jersey Gross Income Tax if they qualify for federal credit due to expenses they incur for the care of one or more qualifying individuals.  A qualifying individual is someone under the age of 13 or a spouse or dependent who lived with the taxpayer for more than half the year and is physically or mentally incapable of self-care.

According to Child Care Aware of America, single parents in New Jersey pay up to 49.4% of their income for center-based infant child care. This legislation will help working families receive benefits and refunds that will allow them to better afford the child care services that they need.

Upon committee approval of the measure, Assembly members Mosquera, Freiman, Swain, and Timberlake issued the following joint statement:


“There have been long-standing issues preventing hard-working families from receiving the meaningful support that they deserve.  Child and Dependent Care expenses are immense and more families need help.  By increasing the income limit, removing the current cap of $500, and making the credit refundable, we can ensure that more families in need of financial support will receive the proper tax credit.

“Affording the proper care for loved ones is difficult for many households in New Jersey. Parents should have the ability to take care of their families without sacrificing other aspects of everyday life.  Every child and dependent deserves the proper care and this bill will greatly help families offset a portion of their child and dependent care expenses.

“Over the pandemic, major childcare issues have been exacerbated.  With parents rapidly returning to work while the pandemic continues, childcare is now more important than ever.  Allowing families to reclaim some of their money spent on childcare will enable parents to transition back to work with one less thing to worry about.”