Increases the child and dependent care credit

BILL NUMBER:S2273

Title of bill

An act to amend the tax law, in relation to increasing the minimum child and dependent care credit against the personal income tax

Purpose/summary of provisions

Paragraph 1 of subsection (c) of section 606 of the tax law, as amended by section 8 of part A of chapter 56 of the laws of 1998, is amended, to increase the minimum child and dependent care tax credit against the state personal income tax from 20% to 50% of the Federal Child and Dependent Care Tax Credit.

Justification

This act amends the tax law to increase the child and dependent care tax credit against the state personal income tax from 20% to 50% of the Federal Child and Dependent Care Tax Credit. Section 44-a of the Internal Revenue Code provides for a child and dependent care tax credit and New York State offers a 20% maximum credit against personal tax of the federal credit. This measure raises the level to a 50% maximum state credit of the federal credit. Rising child and dependent care costs are becoming an incentive for individuals to leave the work force, and can subsequently place a burden on the state; i.e., unemployment and a declining economy. This legislation would enable individuals to increase the credit against the state personal income tax and provide them with a greater incentive to remain active in the work force.

Effective date

This act shall take effect immediately and shall apply to taxable years commencing on and after January 1, 2012.