ICYMI: Speaker Coughlin, Assembly Takes Up Child Care Tax Cut in First Post-Election Voting Session

80,000 New Jersey Families to See Relief, Continuing Assembly Focus on Affordable, Quality Child Care

Members of the Assembly convened Thursday for the first voting session of lame duck. High on the agenda for a vote, Assembly Speaker Craig J. Coughlin (D-Middlesex) put legislation to expand New Jersey’s state Child and Dependent Care Tax Credit (A-6071). Passing both houses unanimously, 77-0-0 in the Assembly and 35-0 in the Senate, the credit expansion estimated to benefit an additional 80,000 New Jersey families now heads to the Governor’s desk.

The Child and Dependent Care Tax Credit offers working parents a boost against their New Jersey Gross Income tax to help cover the cost of care for children under 13 or adult dependents.

“Our families and state economy rely on childcare access, and its cost cannot come at their expense,” said Speaker Coughlin. “Faced with juggling caregiving and work, an increasing number of women are leaving or not returning to the workforce. Expansion of New Jersey’s Child and Dependent Care Tax Credit will provide the needed breathing room to help families afford childcare, reflecting our commitment to meaningfully support our working families and to tackling affordability.”

The legislation would make the credit fully refundable allowing the full credit to better reach families with no tax liability. Low-income families have typically missed out on receiving their full credit because it has been non-refundable. Isolated from the federal expansion in effect for the 2021 tax year, for those making under $20,000 the changes will mean a $110 boost to the average credit.

The bill will also more than double the income eligibility limit, from $60,000 to $150,000, helping working middle-class families who have struggled to make their paychecks stretch to cover childcare costs.

Center-based childcare in New Jersey, at an average cost of $15,600, is estimated to be higher than the average annual cost of public college tuition. Among single parents, who reportedly spend 49 percent of their income on childcare, affordability becomes an even greater challenge.

The measure comes after Assembly Democrats led on the creation of the $100 million Child Care Revitalization Fund in June to ensure childcare facilities could remain operational during the pandemic.