2023 New Jersey Revised Statutes › Title 54 - Taxation › Section 54:8A-15.1 - Household, and household and dependent care services necessary for gainful employment credits

54:8A-15.1. Household, and household and dependent care services necessary for gainful employment credits
a. Household credit. (1) For taxable years beginning on and after January 1, 1978, a credit shall be allowed against the tax imposed by subsection 6(c) of P.L.1961, c. 32 (C. 54:8A-6(c)). The credit, computed as described in paragraph (2) of this subsection, shall not exceed the tax imposed by subsection 6(c) of P.L.1961, c. 32 (C. 54:8A-6(c)) for the taxable year, reduced by the credits permitted under subsection (b) of this section and section 16 of P.L.1961, c. 32 (C. 54:8A-16).
(2) The amount of the credit allowed pursuant to this subsection for taxable years beginning prior to January 1, 1982, shall be determined in accordance with the following table:
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The credit If household gross income is shall be
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Less than $5,000.00 $65.00 $5,000.00 but less than $6,000.00 $50.00 $6,000.00 but less than $7,000.00 $40.00 $7,000.00 but less than $25,000.00 $35.00
The amount of the credit allowed pursuant to this subsection for taxable years beginning in 1982 and thereafter shall be determined in accordance with the following table:
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The credit If household gross income is shall be
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Less than $5,000.00 $70.00 $5,000.00 but less than $6,000.00 $55.00 $6,000.00 but less than $7,000.00 $45.00 $7,000.00 but less than $25,000.00 $40.00
(3) For the purposes of this subsection:
(A) "Household gross income" shall mean the aggregate entire gross income of a household, as the term household is defined in subparagraph (B) of this paragraph, for the taxable year, plus the aggregate entire minimum taxable income of that household.
(B) "Household" means a husband and wife, a head of a household, a surviving spouse, or an individual who is not married nor the head of a household nor a surviving spouse nor a taxpayer with respect to whom a deduction under subsection (e) of section 151 of the Internal Revenue Code is allowable to another taxpayer for the taxable year.
(C) "Household gross income of a husband and wife" shall be the aggregate of their entire gross incomes for the taxable year plus the aggregate of their entire minimum taxable incomes irrespective of whether joint or separate tax returns are filed; provided, however, that a husband or wife filing a separate New Jersey tax return shall be permitted one-half of the credit otherwise allowed his or her household, except as limited by paragraph (1) of this subsection.
(D) "Household gross income" shall be computed in all cases to reflect the entire gross income from all sources of each member of the household for the entire taxable year.
(E) If a taxpayer changes his status during his taxable year from resident to nonresident, or from nonresident to resident, the household credit shall be prorated to reflect the period that the taxpayer was subject to tax under this act. In the case of a husband and wife, if either or both change his or her status from resident to nonresident or from nonresident to resident and separate returns are filed, the credit computed for the entire year shall be divided first as provided in subparagraph (C) of this paragraph and then prorated according to each period that the taxpayer was subject to tax under this act.
b. Credit for certain household and dependent care services necessary for gainful employment.
(1) For taxable years beginning on and after January 1, 1977, a taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by subsection 6(b) or 6(c) of P.L.1961, c. 32 (C. 54:8A-6(b) or 6(c)) of this act. Except as provided below, the amount of the credit shall be 20% of the credit allowed such taxpayer pursuant to the provisions of section 44A of the Internal Revenue Code for the same taxable year. The amount of such credit shall not exceed the tax imposed by subsection 6(b) or 6(c) of P.L.1961, c. 32 (C. 54:8A-6(b) or 6(c)), as may apply, of this act, for the taxable year, reduced by the credit permitted under section 16 of P.L.1961, c. 32 (C. 54:8A-16).
(2) In the case of a husband and wife who file a joint federal return, but who elect to determine their New Jersey taxes separately, the credit allowed pursuant to this subsection may only be applied against the tax imposed on the spouse with the lower entire net income computed without regard to such credit.
(3) Any taxpayer who is otherwise eligible to take the credit permitted by this subsection shall be permitted to take the full amount of such credit except that if (a) his gross income, as defined in section 7 of P.L.1961, c. 32 (C. 54:8A-7), is exceeded by (b) his entire gross income by more than $100.00, his credit shall be limited to the amount which represents the same percentage of the total allowable credit which (a) is of (b).
For a husband and wife whose federal taxable income is determined on a joint return but whose New Jersey entire net incomes are determined separately on a single form, the limitation contained in this subparagraph shall be determined by reference to (a) the total of their gross incomes as defined in section 7 of P.L.1961, c. 32 (C. 54:8A-7) and (b) the joint entire gross income they would be required to report if both were determining their tax on their joint entire gross income.
L.1978, c. 131, s. 7, eff. Oct. 18, 1978. Amended by L.1981, c. 374, s. 7, eff. Dec. 30, 1981.