This bill introduces a new provision allowing taxpayers in New Jersey to deduct employment-related childcare expenses from their gross income. Specifically, taxpayers can deduct the amount they paid for dependent care services for children under the age of 13 during the taxable year. However, expenses for which a taxpayer claims a credit under existing law (specifically section 5 of P.L.2018, c.45) cannot be deducted. The bill clarifies that "employment-related expenses" align with the federal definition, excluding household service expenses.

Additionally, the bill amends the existing law regarding the gross income tax credit for dependent care services. It specifies that any expenses for which a deduction is claimed under the new provision cannot also be claimed for the existing credit. This ensures that taxpayers cannot double-dip by claiming both a deduction and a credit for the same expenses. The bill is set to take effect immediately and will apply to taxable years beginning on or after January 1 of the year following its enactment.

Statutes affected:
Introduced: 54A:4-17