Sponsored by:
Assemblywoman MITCHELLE DRULIS
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblyman MICHAEL VENEZIA
District 34 (Essex)
Co-Sponsored by:
Assemblyman Sampson
SYNOPSIS
Provides gross income tax credit to taxpayers for qualified youth sports expenses paid or incurred on behalf of dependents.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a gross income tax credit to taxpayers for qualified youth sports expenses and supplementing chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer shall be allowed a credit against the tax otherwise due under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., in an amount equal to the qualified youth sports expenses paid or incurred by the taxpayer for, or on behalf of, a qualifying individual during the taxable year, not to exceed $2,000 per qualifying individual.
b. To claim the credit allowed pursuant to this section, the taxpayer shall attach documentation to any return which the taxpayer is required to file under N.J.S.54A:1-1 et seq., in a form and manner prescribed by the director, substantiating the qualified youth sports expenses paid or incurred by the taxpayer during the taxable year. Such documentation shall include, but shall not be limited to:
(1) itemized receipts, invoices, or contracts related to a qualifying individual’s participation in youth sports, including any itemized receipts or invoices that clearly identify the qualifying individual as a youth sports participant;
(2) canceled checks, credit card statements, or other proof of payment corresponding to the itemized receipts, invoices, or contracts;
(3) a description of the itemized receipts, invoices, or contracts demonstrating that those expenses are related to a qualifying individual’s participation in youth sports; and
(4) any additional requirements and procedures the director deems necessary to prevent fraud and ensure proper substantiation of qualified youth sports expenses.
c. As used in this section:
"Qualified youth sports expenses" means expenses paid or incurred for: youth sports registration and participation fees; youth sports uniforms, equipment, and safety gear; youth sports travel expenses, including any transportation and lodging necessary for participation in a youth sports tournament or event; youth sports training and instructional fees; and youth sports tournament and event registration fees.
"Qualifying individual" means a dependent of the taxpayer who is not younger than 10 years and not older than 18 years during the taxable year in which the tax credit is claimed.
2. Within the 12 months following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the director shall take any steps necessary to advertise the availability of the tax credit authorized pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), which advertisements shall be provided, at a minimum, to municipalities, school districts, and youth sports teams and leagues throughout the State.
3. This act shall take effect immediately and apply to taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill provides a gross income tax credit to taxpayers who pay or incur qualified youth sports expenses on behalf of certain children during the taxable year.
Under the bill, a taxpayer would be allowed to claim a gross income tax credit for any qualified youth sports expenses paid or incurred by the taxpayer on behalf of a qualifying individual during the taxable year, not to exceed $2,000 per qualifying individual. The bill defines a “qualifying individual” to mean any dependent of the taxpayer who is not younger than 10 years and not older than 18 years during the taxable year in which the tax credit is claimed.
The bill defines “qualified youth sports expenses” as expenses paid or incurred for: (1) youth sports registration and participation fees; (2) youth sports uniforms, equipment, and safety gear; (3) youth sports travel expenses, including any transportation and lodging necessary for participation in a youth sports tournament or event; (4) youth sports training and instructional fees; and (5) youth sports tournament and event registration fees.
The bill also requires the Director of the Division of Taxation in the Department of the Treasury to take any steps necessary to advertise the availability of the tax credit to municipalities, school districts, and youth sports teams and leagues throughout the State.