Proposed California Bill Would Give Tax Credit to Caregivers

Credit: theweeklychallenger.com

Tax Day has come and gone. Tax credits can help to ease the burden of how much we owe. In California, a new bill proposed in the state legislature would create a tax credit for caregivers for five years, starting in tax year 2020.

The bill, written by state Assemblyman Jim Patterson, would give family caregivers in California a tax credit of up to $5,000. They’d be reimbursed for 50 percent of eligible expenses, such as retrofitting homes, hiring outside help or buying specialty equipment. Individuals making up to $170,000 per year or joint filers making up to $250,000 would be eligible for the credit.

A 2016 report from AARP found that family caregivers around the country on average spend $6,954 per year out-of-pocket while caring for loved ones. Estimates put the number of family caregivers in California who care for a loved one with a chronic or serious health condition at 4.5 million. So a credit of $5,000 would certainly come in handy for many in the state. Caregiving is stressful enough without having to worry about finances.

Expenses for caregivers run the gamut in terms of function and cost. Medical wipes can cost $7. Major home improvements, such as installing a walk-in shower or hiring outside help can cost tens of thousands of dollars.

A woman in San Mateo, California, said she has spent about $72,000 on caregiving costs in the four years since her husband was diagnosed with Alzheimer’s disease. Paying for outside help, medications and supplies adds up quickly. In the San Francisco Bay Area, home health aides can cost $25 to $35 an hour.

Credit: aarp.org

“The cost can be staggering,” said Patterson. “If members of the legislature and the governor would look through the eyes of their own families, friends and neighbors … I think it can be passed and be signed.”

Long-term caregiving has become a popular issue in California’s state government this year. Different proposals such as naming an “Aging Czar” and funding a new cash benefit for long-term care services have made appearances.

Governor Gavin Newsome has asked former first lady Maria Shriver to lead an Alzheimer’s Prevention and Preparedness Task Force. He’s also asked lawmakers to approve $3 million for Alzheimer’s research.

Nationwide Effort

AARP is attempting to have similar tax credit bills passed in at least seven other states this year. Arizona, Illinois, Nebraska, New Jersey, New York, Rhode Island and Wisconsin are considering legislation. AARP also expects measures to be introduced in Florida, Massachusetts and Ohio.

“We need a whole discussion about how we can best keep people at home and meet their needs,” said Wisconsin state Rep. Debra Kolste.

New Jersey approved state tax credit in 2017 specifically for caregivers of wounded veterans. Similar efforts in Arizona failed last year and in Mississippi and Virginia this year. And bills that would have created a federal income tax credit of up to $3,000 for caregivers never graduated from congressional committees last year.

Credit: elderlawanswers.com

“Whether I’m in Billings, Montana, or in Mississippi, the caregiver tax credit is something that people are asking for,” said Elaine Ryan, AARP’s vice president of State Advocacy and Strategy Integration. “All they’re asking for is a little financial help to offset these costs.”

Clearly, lawmakers throughout the country realize that a tax credit for caregivers would be beneficial. The goal is to make sure that people can stay in their homes and not have to flock to care centers. Easing financial burdens, particularly when families are on fixed incomes, would go a long way to help the issue. Hopefully, state governments realize these laws are becoming ever more necessary as the population ages.