It is no secret that the cost of living in New Jersey is among the highest in the nation. This reality is even more difficult for working parents raising young children and paying skyrocketing childcare costs.
Recognizing this struggle and the ongoing financial challenges brought on by the pandemic, Governor Murphy signed legislation on Friday, December third, to help support working families and women who have been forced to leave the workforce in record numbers.
How New Jersey’s Expanded Child and Dependent Care Tax Credit works:
If your family income is less than $150,000/year, you can apply for an expanded tax credit for childcare expenses you incurred in 2021. This is more than double the previous income eligibility level that only applied to those making less than $60,000/year.
The law also eliminates the $500 cap for employment-related expenses for one child and the $1,000 cap for employment-related expenses for two or more dependents. Since this new law is based off the federal law, the amount of the New Jersey credit is a percentage of your federal child and dependent care credit.
Lastly, if your childcare expenses exceed your tax liability for fiscal year 2021, you will receive a refund for the remaining funds.
Childcare and Working During the Pandemic
This new law is among several recent federal and state laws that have attempted to help working families during the pandemic who are struggling to pay for childcare. According to a Care.com national survey of 3,000 parents, 94% of parents said they had to cut back on childcare expenses by reducing their hours at work, changing jobs or leaving the workforce. 85% of the families said they are spending 10% or more of their household income on childcare. This large increase is due to the substantial health and safety measures that childcare centers had to employ as a result of the pandemic.
We Are Here to Help
The pandemic has been tough on working families and especially women who have been forced to leave the workforce in record numbers. McOmber McOmber & Luber, P.C. supports working families and our experienced employment lawyers are here to make sure you receive the salary and benefits you deserve. To find out more, you can contact us at our office in Red Bank, New Jersey at 732-842-6500, our Marlton, New Jersey office at 856-985-9800, or our office in Newark, New Jersey at 973-878-9040.