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UPDATED: Murphy signs a bill that expands child care tax credit for families earning up to $150K. Childcare tax credit is now available for families who make up to $150K

UPDATED: Murphy signs a bill that expands child care tax credit for families earning up to $150K. Childcare tax credit is now available for families who make up to $150K

New Jersey families who earn up to $150,000 per year may apply for an expanded tax credit next year that reduces the cost of their child care expenses under a bill that sailed through both houses of the state Legislature Thursday and Gov. signed into law Friday.

The bill () was introduced on Nov. 8, less than a week after the Nov. 2 election, and Democrats the majority party in Trenton seven seats in the state Legislature.

Pundits and politicians interpreted the results as a reflection of how expensive it is to live in New Jersey, a theme Republican gubernatorial challenger against Murphy, the Democratic incumbent Murphy dominated by 3 percentage points, a lower margin than forecasts.

On Thursday afternoon, Murphy acted 24 hours later to make the tax credit bill. The bill was passed by the state Assembly 77-0 and the state Senate 35-0.

According to Murphy in a statement announcing the legislation's adoption, This legislation will assist ensure affordable childcare, a vital element of bringing hardworking New Jerseyans back into the workforce and reducing the epidemic's she-cession caused by the epidemic.

In October, federal pandemic assistance to assist parents pay for child care, offer incentives to child care workers, and dole out grants to child care centers has been a major concern throughout the epidemic, as New Jersey's unemployment rate is 7%.

According to a national survey, 3,000 parents this year said they have cut back on child care expenditures by decreasing their hours at work, changing jobs, or leaving the workforce. The average cost of weekly child care services for a toddler was $340 last year in the nation, according to the study.

Overmajor childcare problems have been exacerbated. With parents returning to work while the epidemic continues, childcare is now more important than ever, the Assembly sponsors of the bill, led by Assemblywoman Gabriella Mosquera, stated in a statement. Allowing families to reclaim some of their money spent on childcare will enable parents to return to work with one less thing to worry about.

The tax credit is refundable, meaning a family would receive a refund if the credit amount is more than their tax bill. New Jersey already has a tax credit program for child care that is based on the federal child care tax credit, but under current law the credit cannot exceed $500 per person and $1,000 for two or more people. The tax credit is also refundable, which is an increase from the current $60,000 annual salary limit.

The increased program is expected to benefit 80,000 more families, with an increase in an increasingly number of women (who) are leaving or not returning to the workforce, Assembly Speaker, D-Middlesex, stated.

Expansion of New Jersey's Child and Dependent Care Tax Credit will provide the required breathing room to assist families in providing childcare, reflecting our commitment to meaningfully support our working families and addressing affordability, Coughlin said.

The New Jersey Business and Industry Association's Director of Government Affairs Alexis Bailey said that the bill has the backing of the New Jersey Business and Industry Association.

Childcare access is a foundation of our economic recovery as we emerge from the epidemic, Bailey said. New Jersey continues to face unprecedented workforce shortages across all industries. Our participation rate among female workers is at its lowest point in three decades. Any legislation like this that can increase childcare access will assist our state.

Peter Chen, senior policy analyst for New Jersey Policy Perspective, predicted the tax credit would assist lower the back-breaking cost of child care, which consumes 34% of income among poor families.

Chen said, "Expanding the child and dependent care tax credit will bring money back to parents and caretakers who are living enormous annual childcare costs, which are often as high as in-state college tuition," he added.

Although this is only a one-year alteration and a minor element of addressing New Jersey's child care crisis, the increased credit is a vital lifeline for families struggling to care for the state's youngest childrenand a step toward making it a more equitable state that treats working people with dignity, Chen added.

According to the nonpartisan New Jersey Office of Legislative Services, implementing the legislation would set the state $76.2 million this year.

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