The Senate Majority Leader M. Teresa Ruiz introduced a comprehensive childcare bill package over two years ago, aiming to support providers, employees, and parents. Among these proposals, a significant bill intended to establish a gross income tax credit for childcare staff and registered family daycare providers has yet to be finalized.
This week, bill A-2243 successfully passed its first committee test of the 2024-25 session. Althea D. Ford, NJBIA Vice President of Government Affairs, emphasized the importance of maintaining momentum to ensure it reaches Governor Phil Murphy's desk. "This is legislation that is critically important to help address the staffing shortage childcare providers continue to face," Ford stated.
Ford highlighted the critical role of childcare during the pandemic and its ongoing struggles with attracting and retaining staff. She believes this bill could improve the situation significantly by offering an earned income tax credit for employees earning $45,000 or less annually. The proposed tax credit ranges from $500 to $1,500 based on salary and the age group cared for, with higher credits for those caring for infants and toddlers.
The estimated fiscal impact stands at approximately $10 million per year. "We believe this is a modest investment that could pay huge dividends in terms of supporting the childcare workforce," Ford said.
The Assembly Children, Families and Food Security Committee advanced the bill unanimously on Monday. During the pandemic, Governor Murphy had altered state subsidy payments for childcare service providers based on enrollment rather than attendance—a move he extended several times post-pandemic but vetoed extending further into 2025 earlier this year.
Ford noted that this decision underscores the importance of passing bill A-2243 as it returns to committees for further votes. "We credit Governor Murphy for changing that determinant for childcare subsidy payments during the pandemic," she acknowledged while expressing hope that he will sign this current bill if it reaches his desk.
Ford concluded by stressing how essential operational childcare facilities are for working parents who depend on them: "Childcare providers have very unique challenges and when they close or are not solvent, it has devastating implications."
