Tax Credit; Long-term Care
Provides a $5,000 tax credit for providers of eligible care recipients.
TWENTY-SECOND LEGISLATURE, 2004
STATE OF HAWAII
A BILL FOR AN ACT
relating to caregiver tax credit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows
"§235- Caregiver tax credit. (a) There shall be allowed to each eligible taxpayer who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes, who files a net income tax return for a taxable year, a caregiver tax credit that shall be deductible from the taxpayer's net income tax liability imposed by this chapter for the taxable year in which the tax credit is properly claimed; provided that an eligible taxpayer who has no income or no income taxable under this chapter and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for federal or Hawaii state individual income tax purposes may claim this tax credit; provided further that a husband and wife filing separate returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.
(b) The amount of the tax credit shall be $5,000; provided that:
(1) A taxpayer may claim the tax credit for every eligible care recipient cared for;
(2) The tax credit may be claimed for every taxable year that an eligible care recipient is cared for;
(3) Only one caregiver may claim a tax credit for a care recipient for each taxable year; and
(4) No refund or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.
(c) To qualify for the income tax credit, the taxpayer shall provide long-term care to an eligible care recipient and be in compliance with all applicable federal, state, and county statutes, rules, and regulations.
(d) If the tax credit under this section exceeds the taxpayer's net income tax liability under this chapter, any excess of the tax credit may be used as a credit against the taxpayer's income tax liability in subsequent taxable years until exhausted.
(e) As used in this section:
"Eligible care recipient" means a person who:
(1) Is sixty years of age or older;
(2) Is a citizen or resident alien of the United States;
(3) Requires substantial assistance due to a loss of functional capability and cannot perform at least defined activities of daily living, including bathing, eating, using the toilet, dressing, or transferring;
(4) Requires substantial supervision to protect the recipient from threat to health or safety due to cognitive impairment;
(5) Needs substantial assistance in order to perform at least one defined activity under paragraph (3);
(6) Is certified by a licensed physician or advanced practice registered nurse as requiring substantial assistance under paragraph (3) or suffering from a cognitive impairment under paragraph (4);
(7) (A) Is related to or is an in-law of the caregiver or caregiver's spouse;
(B) Has lived in the caregiver's home for at least months of the taxable year; or
(C) Has received more than _____ per cent of the care recipient's financial support during the taxable year from the caregiver.
"Eligible caregiver" or "caregiver" means the person providing care to the eligible care recipient who is the taxpayer claiming a tax credit under this section.
(f) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.
(g) The director of taxation shall prepare such forms as may be necessary to claim a tax credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section.
(h) The department of taxation shall report to the legislature annually, no later than twenty days prior to the convening of each regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State during the past year."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2003.