ARIZONA HOUSE OF REPRESENTATIVES

HB 2087: family caregiver income tax credit.

PRIME SPONSOR: Representative Carter, LD 15

BILL STATUS: House Engrossed

Abstract

Relating to the family caregiver income tax credit.

Provisions

1. Establishes a tax credit, effective TY 2019 through TY 2027, for qualifying expenses for the care and support of a qualifying family member in the taxpayer's home. (Sec. 3,5)

2. Specifies the following qualifications for eligibility:

a. The taxpayer must file a return as an Arizona resident.

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

c. The taxpayer's income, combined with any Arizona gross income of each qualifying family member, must not exceed $75,000 in the case of a single person or a married person filing separately or $150,000 in the case of a married person filing a joint return.

i. In the case of a married person filing separately, only one person may claim the credit. (Sec. 3)

3. Limits the amount of the credit to 50% of qualifying expenses. (Sec. 3)

4. Caps the credit amount at $1,000 for a single taxpayer, head of household or husband and wife filing a joint return.

a. Limits the credit amount for a husband and wife filing separately to one half each of what they could have claimed had they filed a joint return. (Sec. 3)

5. Defines qualifying expenses as those expenses that relate directly to the care or support of a qualifying family member, including:

a. an improvement of the taxpayer's primary residence to enable or assist the qualifying family member to be safe, mobile or independent;

b. the purchase or lease of equipment to enable or assist the qualifying family member; and

c. the acquisition of other goods, services or support to assist the taxpayer in caregiving. (Sec. 3)

6. Excludes regular food, clothing or transportation expenses, ordinary household maintenance and any amount that is paid or reimbursed by insurance or by the federal government, the state or a political subdivision of this state from qualifying expenses. (Sec. 3)

7. Defines qualifying family member as:

a. the taxpayer's spouse or taxpayer's or spouse's child, stepchild, parent, stepparent, grandchild, sibling, uncle or aunt of whole or half blood or by adoption;

b. being at least 18 years old during the taxable year; and

c. requiring assistance with one or more daily activities as certified by a licensed physician. (Sec. 3)

8. Establishes if multiple taxpayers qualify with respect to the same qualifying family member, the credit will be apportioned based on the respective expense amounts incurred. (Sec. 3)

9. Requires the taxpayer to submit, with the claim for the credit, the qualifying family member's name, taxpayer identification code and relationship to the taxpayer. (Sec. 3)

10. Prohibits a taxpayer from claiming the credit more than once every three years, but allows a three-year carry forward. (Sec. 3)

11. Specifies, with respect to the same qualifying family member, the credit is in lieu of the $10,000 exemption for each parent or ancestor of a parent of the taxpayer who is 65 or older, if the taxpayer pays more than one half the person's total support and maintenance costs. (Sec. 3)

12. Caps the amount of the credit at an aggregate of $500,000 per year. (Sec. 3)

13. Requires DOR to:

a. Only accept applications between January 1-31 of the year following the calendar year for which the credit is being requested; and

b. Approve and certify applications on a first-come-first-served basis. (Sec. 3)

14. Makes technical and conforming changes. (Sec. 1-5)

15. Contains a Purpose Clause. (Sec. 4)

Additional Information

A tax credit is a dollar-for-dollar reduction in a taxpayer’s income tax liability. Tax credits are often offered to incentivize some type of action from a taxpayer, such as creating new jobs, investing in environmentally friendly technology or any other action deemed beneficial to the economy.

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Fifty-third Legislature                             HB 2087

Second Regular Session                          Version 3: House Engrossed

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