Childcare Tax Credit

We have always believed that the best anti-poverty program ever devised is a good job. However, for many New Yorkers, one of the biggest obstacles to fulltime employment is the high cost of childcare.
For many low-income parents, paying for childcare too often makes a full time job a net financial loss. For them, it just does not pay to go to work - so many choose to stay home to look after their children, which can prolong the cycle of poverty.
That simply should not be the case - which is why our administration worked with the City Council and our leaders in Albany to create a local childcare tax credit for low-income families. Last week, Governor Spitzer signed that bill into law, making New York one of the first cities in the nation to offer such a benefit.
The tax credit takes effect this year - and any family with a gross household income less than $30,000 a year who pays childcare expenses for children under the age of four is eligible. We believe there are nearly 50,000 families in our city who fall into this category. Most will qualify for around $1,000 in credits on their city personal income taxes, while some will qualify for as much as $1,700.
When combined with the childcare tax credits that the State and Federal governments already offer, our local tax credit will encourage thousands more New Yorkers to seek and hold their jobs. And it will also help make sure that children don’t miss out on the important, early learning experiences that daycare offers and that helps prepare them for school. After all, nearly 50 percent of a child’s learning takes place in the first five years of life.
Our childcare tax credit program is a product of our Center for Economic Opportunity, which is taking aim at poverty in our city through a slate of creative, yet achievable, broad-based initiatives.
A couple of weeks ago, for instance, the Center unveiled an innovative program to give hundreds of young people leaving foster care the financial skills they’ll need to survive on their own. Unlike most other youth, children in foster care do not have relatives to help them find their way financially. Therefore, as part of this program, we also will match every dollar they save with two dollars - giving them the chance to build a $3,000 nest egg for important investments like housing expenses or a college education.
In recent months, the Center for Economic Opportunity has also partnered with the City University system to help more community college students juggle the demands of study and work so that they can earn their degrees. In addition, beginning this September a pilot program will offer privately raised cash to families as a way of encouraging parents and young people to take positive actions - such as staying in school, sustaining a fulltime job, or visiting the doctor for regular checkups - all key ways to rise out of poverty.
Like all of these ambitious initiatives, our childcare tax credit program aims to reduce poverty by helping thousands of low-income New Yorkers help themselves. Only then can they climb the ladder to a better, safer, healthier life for themselves and their families.