HB2087 - 532R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 43-222, Arizona Revised Statutes, is amended to read:

START_STATUTE43-222. Income tax credit review schedule

The joint legislative income tax credit review committee shall review the following income tax credits:

1. For years ending in 0 and 5, sections 43‑1079.01, 43‑1087, 43‑1088, 43-1089.04, 43‑1167.01 and 43‑1175.

2. For years ending in 1 and 6, sections 43‑1074.02, 43‑1083, 43‑1083.02, 43‑1164.03 and 43‑1183.

3. For years ending in 2 and 7, sections 43‑1073, 43‑1080, 43‑1085, 43‑1086, 43‑1089, 43‑1089.01, 43‑1089.02, 43-1089.03, 43‑1164, 43‑1169 and 43‑1181.

4. For years ending in 3 and 8, sections 43-1073.01, 43‑1074.01, 43‑1081, 43‑1168, 43‑1170 and 43‑1178.

5. For years ending in 4 and 9, sections 43‑1076, 43‑1081.01, 43‑1083.04, 43‑1084, 43‑1162, 43‑1164.05, 43‑1170.01 and 43‑1184 and, beginning in 2019, sections 43‑1083.03 and 43‑1164.04. END_STATUTE

Sec. 2. Section 43-1023, Arizona Revised Statutes, is amended to read:

START_STATUTE43-1023. Exemptions for blind persons, persons over sixty‑five years of age and dependents

A. A taxpayer is allowed an exemption of one thousand five hundred dollars:

1. For a taxpayer who is blind or if either the taxpayer's central visual acuity does not exceed 20/200 in the better eye with correcting lenses or the taxpayer's visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than twenty degrees.

2. For the taxpayer's spouse if a separate return is made by the taxpayer, and if the spouse is blind, as defined described in paragraph 1 of this subsection, has no Arizona adjusted gross income for the calendar year in which the taxable year of the taxpayer begins and is not the dependent of another taxpayer. For the purposes of this paragraph, the determination of whether the spouse is blind shall be made at the close of the taxable year of the taxpayer. If the spouse dies during such the taxable year, the determination shall be made as of the time of the spouse's death.

B. A taxpayer is allowed an exemption of two thousand three hundred dollars for:

1. Each dependent of the taxpayer, as defined in section 43‑1001.

2. Each person age sixty‑five or older regardless of the person's relationship to the taxpayer:

(a) If the taxpayer pays more than one‑fourth of the total cost of maintaining such the person in a nursing care institution or residential care institution licensed pursuant to title 36, chapter 4, or an assisted living facility provider of a type certified pursuant to title 11, chapter 2, article 7, if such the payments exceed eight hundred dollars in the taxable year.

(b) If the taxpayer otherwise makes payments exceeding eight hundred dollars in the taxable year for home health care or other types of medical care.

3. For taxable years beginning from and after December 31, 2003, each birth for which a certificate of birth resulting in stillbirth has been issued pursuant to section 36‑330 if the child otherwise would have been a member of the taxpayer's household. The taxpayer may claim the exemption under this paragraph only in the taxable year in which the stillbirth occurred.

C. For taxable years beginning from and after December 31, 1998, a resident taxpayer is allowed an exemption of ten thousand dollars for each parent or ancestor of a parent of the taxpayer, who is age sixty‑five or older, who requires assistance with activities of daily living and who lives in the taxpayer's principal residence for the entire taxable year, if the taxpayer pays more than one‑half of the person's total support and maintenance costs. An exemption under this subsection is in lieu of:

1. An exemption under subsection B of this section for the same person.

2. A credit under section 43-1073.01 with respect to the same person.

D. A taxpayer shall not take more than one exemption for the same person under either subsection B or C of this section.

E. A taxpayer is allowed an exemption of two thousand one hundred dollars:

1. If the taxpayer has attained the age of sixty‑five before the close of the taxable year filing a separate or joint return and the taxpayer is not claimed as a dependent by another taxpayer.

2. For the taxpayer's spouse if the spouse has attained the age of sixty‑five before the close of the taxable year, a joint return is filed and the spouse is not a dependent of another taxpayer. END_STATUTE

Sec. 3. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1073.01, to read:

START_STATUTE43-1073.01. Family caregiver income tax credit; definition

A. For taxable years beginning from and after December 31, 2018 and ending before January 1, 2027 and subject to the terms and conditions of this section, a credit is allowed against the taxes imposed by this chapter for a taxpayer who incurs qualifying expenses during the taxable year for the care and support of a qualifying family member in the taxpayer's home.

B. To qualify for the credit under this section:

1. the taxpayer must file a return as a resident of this state.

2. The taxpayer's Arizona gross income, together with any Arizona gross income of each qualifying family member, in the taxable year may not exceed:

(a) Seventy-five thousand dollars in the case of a single person or a married person filing separately.

(b) One hundred fifty thousand dollars in the case of a married couple filing a joint return.

3. The taxpayer must incur qualifying expenses during the taxable year for the care of one or more qualifying family members.

4. The taxpayer must submit, with the claim for the credit, the qualifying family member's name, taxpayer identification number and relationship to the taxpayer.

C. The amount of the credit is equal to fifty percent of the qualifying expenses incurred during the taxable year but not more than:

1. In the case of a single taxpayer or head of a household, one thousand dollars for each qualifying family member.

2. In the case of a husband and wife filing a joint return, one thousand dollars for each qualifying family member. A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half of the credit that would have been allowed for a joint return.

D. For the purposes of this section:

1. Qualifying expenses must relate directly to the care or support of a qualifying family member and include:

(a) The improvement or alteration of the taxpayer's primary residence, whether owned or rented by the taxpayer, to enable or assist the qualifying family member to be mobile, safe or independent.

(b) The purchase or lease of equipment to enable or assist the qualifying family member to carry out one or more daily living activities.

(c) The acquisition of other goods, services or support to assist the taxpayer in caring for the qualifying family member, including employing a home care aide or personal care attendant or securing adult day care, transportation, legal or financial services or assistive care technology.

2. Qualifying expenses do not include:

(a) Regular food, clothing or transportation expenses or gifts provided to the qualifying family member.

(b) Ordinary household maintenance or repair that is not directly related to and necessary for the care of the qualifying family member.

(c) Any amount that is paid or reimbursed by insurance or by the federal government, this state or a political subdivision of this state.

3. In the case of married persons filing separately, only one spouse may claim the credit under this section.

4. If more than one taxpayer qualifies for credit under this section with respect to the same qualifying family member in the same taxable year, the amount of the credit, within the limits prescribed by subsection C of this section, shall be apportioned between or among the qualifying taxpayers according to the respective expense amounts incurred.

E. A taxpayer who claims a credit under this section is not eligible to claim a credit under this section again for three consecutive taxable years, except that if the amount of the allowable credit in a taxable year exceeds the taxes otherwise due under this title, or if there are no taxes due under this title, the taxpayer may carry the unused amount of the credit forward for not more than three consecutive taxable years. Thereafter, any unused amount of the credit is waived, and may not be refunded, transferred or otherwise used to offset taxes.

F. A credit under this section is in lieu of an exemption under section 43-1023, subsection C with respect to the same person.

G. Before filing a tax return and claiming a credit under this section, a taxpayer must apply to the department, on a form prescribed by the department, for certification of the credit. The department shall accept, review and certify applications for the credit as follows:

1. The department may only accept applications beginning from and after January 1 through January 31 of the year following the calendar year for which the credit is being requested.

2. The department shall approve and certify correct and complete applications on a first-come, first-served basis subject to paragraph 3 of this subsection.

3. the department may not approve and certify credits under this section that exceed in the aggregate a dollar amount of five hundred thousand dollars for any calendar year. The department shall deny any subsequent application that would exceed the dollar limit. A failure to claim an approved credit for any reason has no effect on other applications that were denied under this paragraph as exceeding the dollar limit.

H. For the purposes of this section, "qualifying family member" means an individual who meets all of the following requirements:

1. Is at least eighteen years of age during the taxable year.

2. Requires assistance with one or more daily living activities, as certified by a physician who is licensed pursuant to title 32, chapter 13 or 17.

3. Is the taxpayer's spouse or the taxpayer's or spouse's CHILD, GRANDCHILD, stepchild, parent, stepparent, GRANDPARENT, sibling, uncle or aunt, whether of the whole or half blood or by adoption. END_STATUTE

Sec. 4. Purpose

Pursuant to section 43-223, Arizona Revised Statutes, the legislature enacts section 43-1073.01, Arizona Revised Statutes, as added by this act, to mitigate the costs incurred by taxpayers who provide unreimbursed care in their homes for a qualifying adult family member who requires assistance in daily living activities.

Sec. 5. Delayed repeal; carryforward

Section 43-1073.01, Arizona Revised Statutes, as added by this act, is repealed from and after June 30, 2027, except that the repeal does not affect any credit amounts authorized to be carried forward beyond the repeal date.