More NJ Families Eligible for Child Care Tax Credit Through New Law
Governor Murphy announced on Friday legislation that will increase the number of NJ families eligible for the state's Child and Dependent Tax Credit.
Now, taxpayers earning incomes of $150,000 or less that have childcare and other household expenses will be eligible for credit beginning in 2021. Currently, incomes of only $60,000 or less make taxpayers eligible. The American Rescue Plan created an expansion in federal credit for tax year 2021, which the increases state credit is based on.
Murphy explained the legislation intends to ensure affordable access to childcare to help NJ residents, especially working mothers, who left the workforce due to childcare demands during the COVID pandemic.
The bill also revises the Child and Dependent Care Tax Credit so it is refundable in 2021 and removes 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.
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