AARP Nebraska celebrates new family caregiver tax credits for ‘unsung heroes’
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LINCOLN — AARP Nebraska is celebrating a newly passed proposal that would help cover family caregivers’ costs as they care for and support eligible family members.
State Sen. Eliot Bostar of Lincoln, center, is flanked by State Sens. Carolyn Bosn and Beau Ballard, from left to right, both of Lincoln. April 10, 2024. (Zach Wendling/Nebraska Examiner)
Lawmakers approved Legislative Bill 937, which includes Lincoln State Sen. Eliot Bostar’s Caregiver Tax Credit Act, on a 45-0 vote during the final legislative day on April 18. Bostar designated the bill as his personal priority this year; it awaits Gov. Jim Pillen’s approval.
The nonrefundable credits, which would begin Jan. 1, would be equal to 50% of eligible expenditures related to a family member’s care or support of their loved one during the tax year.
“Caregiving is a critically important public health issue that affects the quality of life for millions of individuals nationally and thousands across Nebraska,” Bostar said in a statement.
How to qualify
To qualify, a caregiver must have a federal adjusted gross income of less than $50,000 (or $100,000 if filing as a married couple jointly). They must care for a relative who requires assistance with at least two activities of daily living, as certified by a health care provider, and who lives in a private residence — not an assisted living, nursing or residential care facility.
Activities of daily living
LB 937 lists six activities of daily living that could qualify under the act for a family member:
Movement from one position to another or the ability to walk independently.
Feeding oneself.
Dressing, including the selection of appropriate clothing and putting on clothes without help.
Personal hygiene, including bathing and grooming oneself, dental hygiene and nail and hair care.
Continence, or controlling bladder and bowel movements.
Toileting, or getting to and from the toilet without aid, using it appropriately and cleaning oneself.
Eligible expenses include:
Home improvements or alterations for the caregiver or eligible family member to permit mobility, safety and independence.
Purchases or leasing of equipment necessary for the family member to carry out one or more activities of daily living.
Costs related to hiring a home care aide, respite care, adult day care, personal care attendants, health care equipment or technology.
Costs must be directly related to care and cannot include general household maintenance, such as painting, plumbing, electrical repairs or exterior maintenance.
Individual caregivers can claim up to $2,000 in credits per fiscal year, or $3,000 if the individual is caring for a family member who is a veteran or has a diagnosis of dementia. If two or more caregivers claim an available credit for the same family member, the maximum credit would be divided between each caregiver.
Up to $1.5 million in credits could be claimed each fiscal year through June 30, 2027. The limit increases to $2.5 million in consecutive years.
Supporting ‘unsung heroes’
AARP Nebraska said Nebraska has approximately 179,000 family caregivers, and while each serves in a “labor of love,” the experience is “stressful, isolating and has a real financial cost” — on average more than $7,200 per household per year.
In total, this is more than 168 million hours in care, valued at $2.8 billion, which AARP Nebraska said mitigates more costly, taxpayer-funded long-term care and nursing home stays.
“When lawmakers agree on an issue regardless of political affiliation, the message is clear,” Todd Stubbendieck, state director of AARP Nebraska, said in a statement. “AARP is proud of the Nebraska Legislature for recognizing this critical need to help our state’s unsung heroes.”
The deadline is end of day Wednesday for Pillen to sign the bill or submit his objections to the Nebraska Secretary of State’s Office. As of Monday, the bill had not been signed, according to the Clerk of the Legislature’s Office.
A spokesperson for the governor said Pillen will be presented with LB 937 on Tuesday for his consideration.
More tax credits and exemptions
LB 937 also contained various other proposals for tax credits and exemptions, including these:
LB 1002, from State Sen. Tom Brandt of Plymouth, sets the maximum amount of tax credits under the Nebraska Biodiesel Tax Credit Act for $1 million in the next fiscal year and $1.5 million the following years.
LB 1022, from State Sen. Rita Sanders of Bellevue, establishes the Cast and Crew Nebraska Act, with up to $500,000 available beginning July 1, 2025. It will provide a refundable tax credit equal to at least 20% of a film and TV production company’s qualifying expenditures for projects produced in Nebraska.
LB 606, from State Sen. Joni Albrecht of Thurston, establishes the Nebraska Pregnancy Help Act, allowing Nebraskans to claim a nonrefundable credit of up to 50% off their state income tax liability on contributions made to qualifying pregnancy help organizations. Total credits are limited to $500,000 in the fiscal year beginning July 1, 2025.
LB 58, from State Sen. John Cavanuagh of Omaha, exempts diapers from state sales and use tax. The proposal is estimated to reduce state revenue by $1.2 million in the next fiscal year, then $6.7 million and $8.8 million in subsequent years.
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