NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2674
SPONSOR: Lunsford TITLE OF BILL:
An act to amend the tax law, in relation to increasing the child and
dependent care tax credit
PURPOSE OR GENERAL IDEA OF BILL:
To increase the child and dependent care tax credit to reflect increases
in the cost of child and dependent care.
SUMMARY OF PROVISIONS:
Section 1 amends paragraph (1-b) of subsection (c) of section 606 of the
Tax Law to increase the maximum amount of child and dependent care costs
that are subject to the child and dependent care tax credit commencing
with tax year 2023. Specifically, beginning in tax year 2023, the credit
for families with three qualifying individuals will be $7500, $8500 for
four qualifying individuals, and $9000 for five or more qualifying indi-
viduals; beginning in taxable year 2024, the credits shall be: $6000 for
families with one qualifying individual, $12,000 for two qualifying
individuals, $15,000 for three qualifying individuals, $17,000 for four
qualifying individuals, and $18,000 for five or more qualifying individ-
uals.
Section 2 sets an effective date.
JUSTIFICATION:
Families across New York are struggling to make ends meet with the
rising cost of child and dependent care. The current tax credit is only
available to families with at least 3 dependents and, even then, only
provides a credit up to $7,500-$9,000 depending on the number of chil-
dren. This bill will expand eligibility to families with 1 or 2 children
or dependents and greatly increase the amount of the credit to account
for the enormous cost of care to families with multiple dependents. It
will create a scaled credit to provide more relief to families as the
number of children and dependents in paid-for care increases. For fami-
lies with 1 qualifying individual, a family could claim up to $6,000 on
their taxes; for families of 2, the credit would go to $12,000; for
families of 3, it would go up to $15,000; for families of 4 it would
provide up to $17,000 for 4; and for families of five or more, a claim
could be made for up to $18,000.
Families across New York state rely on quality care for their children
and dependents in order to stay In the workforce and live healthy and
productive lives. The costs of paying for care services have increased
substantially in recent years, with an even more pronounced spike during
the Covid pandemic due to labor shortages and increased costs of consum-
er goods. For families with 3 or more children in daycare the current
tax credit provides very modest relief, and families with only 1 or 2
children receive no relief at all. In 2021, the average .cost for child-
care for a single child in New York State was $21,112 for an infant
(0-18 months); $16,380 for a toddler (18-24 months), and $11,616 for a
preschool-aged child 3-5. That means in 2021, a family with 3 dependents
receiving care, spending an average of $46,000 per year, would qualify
for a $7,500 tax credit and families with 1 or 2 qualifying dependents,
spending $15,000-$30,000 on average for care, would be eligible for
nothing under current law.
The crippling cost of child and dependent care for our families is driv-
ing parents, particularly women, from the workforce; preventing families
from saving money for college, retirement, and emergencies; and causing
families to make difficult financial choices. This bill increases the
child and dependent care tax credit, bringing the state tax credit in
line with cost increases and extending the number of families eligible
for this credit.
PRIOR HISTORY:
2024: Similar Bill (A.1453/Lunsford) Died in Ways and Means
2023: Similar Bill (A.1453/Lunsford) Died in Ways and Means
2022: Similar Bill (A.5010/Lunsford) Died in Ways and Means
2021: Similar Bill (A.5010/Lunsford) Died in Ways and Means
2020: Similar Bill (A.1060/Jaffee) Died in Ways and Means
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect Immediately.
STATE OF NEW YORK
________________________________________________________________________
2674
2025-2026 Regular Sessions
IN ASSEMBLY
January 21, 2025
___________
Introduced by M. of A. LUNSFORD, CLARK, GALLAGHER, McMAHON, ZINERMAN --
read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to increasing the child and
dependent care tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1-b of subsection (c) of section 606 of the tax
2 law, as added by section 2 of part T of chapter 59 of the laws of 2017,
3 is amended to read as follows:
4 (1-b) Notwithstanding anything in this subsection to the contrary, a
5 taxpayer shall be allowed a credit as provided in this subsection equal
6 to the applicable percentage of the credit allowable under section twen-
7 ty-one of the internal revenue code for the same taxable year (without
8 regard to whether the taxpayer in fact claimed the credit under such
9 section twenty-one for such taxable year) that would have been allowed
10 absent the application of section 21(c) of such code [for taxpayers with
11 more than two qualifying individuals], provided however, that the credit
12 shall be calculated as if the dollar limit on amount creditable shall
13 not exceed:
14 (i) seven thousand five hundred dollars if there are three qualifying
15 individuals, eight thousand five hundred dollars if there are four qual-
16 ifying individuals, and nine thousand dollars if there are five or more
17 qualifying individuals for taxable years beginning in two thousand twen-
18 ty-five; and
19 (ii) six thousand dollars if there is one qualifying individual,
20 twelve thousand dollars if there are two qualifying individuals, fifteen
21 thousand dollars if there are three qualifying individuals, seventeen
22 thousand dollars if there are four qualifying individuals, and eighteen
23 thousand dollars if there are five or more qualifying individuals for
24 taxable years beginning in two thousand twenty-six.
25 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04247-01-5
