New Enhanced Middle Class Child Care Tax Credit Will Help Reduce Child Care Costs to More Than 200,000 Working Families Statewide Families Earning Between $60,000 and $150,000 Will See Their Tax Benefits More Than Double on Average Builds on Governor Cuomo’s Nation-Leading Efforts to Expand Opportunity for Middle Class New Yorkers
Governor Andrew M. Cuomo today unveiled a new Enhanced Middle Class Child Care Tax Credit that will help more than 200,000 middle class families make their child care more affordable. For many families, limited access to these programs can force parents to choose between providing safe, quality child care arrangements and work.
“Far too many parents have to sacrifice working to build their family's financial future because affordable, high quality day care is financially out of reach," Governor Cuomo said. "This newly enhanced credit will make it easier for more New Yorkers to be able to secure day care for their children and able to enter or stay in the work force with peace of mind. With this proposal, we will be helping to build a stronger, better New York that truly lives up to its motto: Excelsior.”
Enhanced Middle Class Child Care Tax Credit
The Enhanced Middle Class Child Care Tax Credit would supplement the current New York State Child and Dependent Care Tax Credit and more than double the benefit for families earning between $60,000 and $150,000.
New York State currently offers a fully refundable Child and Dependent Care Tax Credit, which offers a maximum benefit of 110 percent of the federal credit for taxpayers with incomes below $25,000, and the rate phases down to a low of 20 percent of the federal credit for those with incomes of $65,000 or above. For tax year 2014, nearly 520,000 New York families received almost $189 million from this credit.
Under the Governor's proposal, 200,000 families earning between $60,000 and $150,000 would see their average benefit double, on average from $169 to $376. The total program cost would be $42 million. Families making less than $50,000 already receive a considerable benefit.
A breakdown representing how this tax credit will affect middle class families is below:
Old Average State Credit
New Average State Credit
$50,000 – $54,999
$55,000 – $59,999
$60,000 – $64,999
$65,000 - $74,999
$75,000 – $99,999
$100,000 – $149,999
Total Taxpayers Affected
For many families, child care is a necessary and increasingly unaffordable expense. More than 65 percent of children under six years old in New York have both parents in the workforce, increasing the need for stable child care arrangements while parents are working during the day. Limited access to stable child care arrangements can create a considerable productivity loss for New York’s businesses and economy, and leave many families – especially women, on whom the bulk of child care rests – dealing with barriers to employment and advancement that can lower their lifetime earnings.
Under the leadership of Governor Cuomo, New York State is committed to maximizing opportunity for middle class families across the state. The Enhanced Middle Class Child Care Tax Credit willprovide much-needed assistance to families whose child care costs strain their ability to plan and invest in the future.
The Governor's proposal to extend child care tax benefits builds on an unparalleled agenda to support working families, including the nation's longest and most comprehensive paid family leave program, signed into law last year. New York's paid family leave program will begin paying benefits in 2018, the same year the child care tax credit extension would go into effect. When fully phased-in, employees will be eligible for 12 weeks of paid leave when caring for an infant, a family member with a serious health condition, or to relieve family pressures when someone is called to active military service.
Earlier this year, Governor Cuomo took bold steps to improve the safety and accountability of child care programs in New York State. New regulations adopted in 2016 define the conditions under which the state may revoke or suspend a provider’s licenses and increase penalties for serious violations of child care health and safety standards. Governor Cuomo will continue to fight so that child care is safe, reliable, of high quality, and affordable to New York’s working families.