Jun 1, 2026
Owning a pet does more than just leave you with fur on your furniture. Pet ownership has been shown to improve mental health, it may help owners get more exercise (for those with dogs), and it can even promote healthy aging, research shows.
Unfortunately, one thing pet ownership doesn’t help with is sticking to your budget. The American Kennel Club reports that the annual cost of owning a dog is around $2,500, while PetPlace estimates cat care at $760 to $3,495 per year.
Advertisement
Some New Jersey residents could soon get a little help with those costs, though. The Patch reports that Assembly Bill No. 4995 could offer a tax break to dog and cat owners to help with both routine costs and veterinary care bills.
Here’s what this New Jersey law would look like — along with some other details about efforts throughout the U.S. to throw pet owners a bone and subsidize care costs through tax savings.
Paw-sible tax break? Here’s what New Jersey’s tax credit would look like
Assembly Bill No. 4995 was introduced on May 7 by Assemblyman Alex Sauickie. The proposed law would provide up to $900 in gross income tax credits for pet owners, including:
- A $300 credit for everyday pet expenses like food, leashes, crates, grooming supplies, and toys
- A $600 credit for veterinary bills, including annual exams, emergency care, diagnostic testing, and medications
Credits reduce taxes on a dollar-for-dollar basis, which makes them more valuable than deductions. If your tax bill was $1,000 and you got a $900 credit, you would owe only $100 in taxes for the year after subtracting the credit.
To claim the credit, taxpayers would be required to submit documentation showing that they own a pet and would need to provide receipts for the costs they incurred during the year.
While the proposal is still under consideration and no legislation has officially been passed, if it is signed into law, it would go into effect immediately. So taxpayers could claim the savings starting with the next tax year, beginning January 1.
Must Read
- You can now build wealth like a landlord for as little as $100 — and no, you don't have to chase down rent or take 3 A.M tenant calls
- Goldman Sachs used to hoard prime real estate deals for the ultrarich. Two ex-analysts just opened the door for $250
- Robert Kiyosaki begs investors not to miss this ‘explosion’ — says this 1 asset will surge 400% in a year
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Could your state be the next to unleash a pet tax credit?
New Jersey is not the only state considering tax breaks for pet owners.
ABC 7 NY reports that the State Assembly in New York is also working on a bill that would provide a tax credit for up to $150 in expenses for the care of up to two animals, as well as a credit for up to $300 to reimburse vet visit costs.
Advertisement
And, on the federal level, Congresswomen Deborah Ross (NC-02) and Claudia Tenney (NY-24) introduced the bipartisan People and Animals Well-being (PAW) Act last year. The bill would allow HSA and FSA money to be used to cover veterinary care expenses.
With close to 90% of Americans reporting in a YouGov survey that they view their pets as family, it’s not surprising that lawmakers are taking notice and trying to provide more support for pet owners. And this trend is only likely to continue, as pets take on an increasingly important role in society, with more households now owning pets than having children.
Purr-using the tax rules: Are there any current deductions or credits for pet ownership?
Unfortunately, as a general rule, there are no current deductions or credits for pet ownership on the state or federal level.
However, Intuit TurboTax reports that you may be able to deduct the costs of purchasing, training, and caring for a service animal prescribed by a licensed medical professional. You’ll need to meet the requirements for the medical tax deduction, including itemizing your taxes and having total medical expenses that exceed 7.5% of gross income.
If you foster animals through a qualified 501(c)(3) charity, you may also be able to deduct unreimbursed expenses for the animal’s care. Those costs are treated as cash charitable contributions, and beginning in 2026, you can deduct up to $1,000 (or $2,000) in contributions even if you don’t itemize when you file your taxes.
If your pet earns income, such as by working on a movie set, or your pet is a guard dog or working animal used in your business, there are also opportunities for deductions.
Outside of these limited situations, though, you’ll just have to cross your paws that the New Jersey or New York laws pass — and that more states or even the federal government follow their lead.
You May Also Like
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Millionaires under 43 are reshaping investing — just 25% of their portfolios are in stocks. Here’s where their money is going
- Robert Kiyosaki issues grim warning for baby boomers. Many could be ‘wiped out’ and homeless ‘all over’ the country. How to protect yourself now
Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
