By Margie Donlon and Luanne Peterpaul

With the deadline for filing your income tax returns just 11 days away, we want to remind residents who may be eligible that Child and Dependent Care and Veterans tax exemptions from 2023 New Jersey income taxes are available.

Child care costs can put an enormous strain on family finances and the Child and Dependent Care Credit provides some relief. There also are some changes to the eligibility criteria this year that will make the tax credit available to thousands more working families.

The state has increased the taxable income threshold to $150,000 and eliminated the maximum credit limitation. Eligible residents can receive their refund of the credit after they pay their taxes.

 If you are allowed a federal credit for expenses incurred caring for one or more qualifying individuals, you are eligible for a credit against your New Jersey gross income tax. A qualifying individual can be a child under age 13 or a spouse or dependent who lived with you more than half the year and is physically or mentally incapable of caring for themselves.

You can find an explanation of how to claim the 2023 Child and Dependent Care Credit on page 43 of the NJ-1040 Tax Form Instructions, but here’s generally how it works:

The Child and Dependent Care Credit will reduce the amount of New Jersey Gross Income Tax a taxpayer owes, and may result in a refund if no taxes are owed. 

If you paid expenses for the care of one or more qualifying individuals so you are able to work or actively look for work; are allowed to take the federal child and dependent care credit; and you meet the income limits, you are eligible for Child and Dependent Care Credit. The amount of the state credit is a percentage of the taxpayer's federal child and dependent care credit and varies according to the amount of your New Jersey taxable income.

Military veterans, who were honorably discharged from active duty in the Armed Forces any time before the end of last year, are eligible for a $6,000 exemption on their New Jersey income tax return. A veteran’s spouse or civil union partner also is eligible for an exemption if their partner is a veteran who was honorably discharged and you are filing a joint return. This exemption is in addition to any other exemptions you are entitled to claim and is available on both the resident and nonresident tax returns. Be sure to fill in the oval (resident return) or check the box (nonresident return) when completing your tax return or you will not receive an exemption. Each person applying for the exemption will have to provide official documentation showing that they were honorably discharged.

If you submitted a Veteran’s Exemption Submission form and supporting documents, you can check the status of your claim on the New Jersey Treasury’s Division of Taxation Site. 

We also would like to remind LD11 seniors that applications for the Senior Freeze Property Tax Reimbursement are available. 

There are also a few important changes to Senior Freeze, too. The income limit has increased to $163,050 for 2023. There is no longer a New Jersey residency requirement of 10 consecutive years. Along with our LD11 legislative partner, Senator Vin Gopal, we encourage seniors to contact our office at (732) 695-3371 with questions or for a Senior Freeze application and a member of the LD11 staff will help you.