Caregiver Tax Credit Act Hearing Brings Powerful Testimony

AARP Nebraska is bringing attention to Nebraska Legislature Bill 937 to Adopt the Caregiver Tax Credit Act. Introduced by State Senator Eliot Bostar, LB937 would help ensure family members who take care of their relatives with disabilities—incurring eligible expenditures for their care and support—are paid for their critical caregiving work through a nonrefundable tax credit.

The bill is modeled off Oklahoma’s “Caring for Caregivers Act” which passed in 2023 and became effective January 1 of this year. Sen. Bostar stated, “Caregiving is a critically important public health issue that affects the quality of life for millions of individuals nationally and thousands across Nebraska.”

Caregivers may provide aid for health needs, daily activities, and emotional support. While not a new concept, it’s continually becoming more complex and challenging. According to a 2021 AARP Caregiving Cost-Study, nearly eight in ten family caregivers (78%) incur out-of-pocket costs due to caregiving. Often, caregivers sacrifice their careers and financial futures by reducing working hours, taking on debt, and tapping into their own savings—ultimately jeopardizing their own retirement security.

Nebraska State Director for AARP Todd Stubbendieck added, “Family caregivers are the backbone of the U.S. care system—helping parents, spouses, and other loved ones live independently in their homes. This amounts to about $600 billion annually in unpaid care. In our state, there are over 179,000 unpaid family caregivers providing over 168 million hours of care valued at $2.8 billion.”

AARP Nebraska State President Suzan DeCamp will be testifying at the January 25 hearing. DeCamp shared, “According to a University of Nebraska-Omaha report, 7.8% of Nebraskans age 65 and older are living in poverty. These people are struggling to make ends meet, but in many cases, they’re also providing care for a loved one that allows that person to continue to live at home.”

The proposed bill is outlined for taxable years beginning after January 1, 2025. The amount of the credit shall be equal to 50% of the eligible expenditures incurred during the taxable year. The maximum allowable credit in any single tax year for a family caregiver shall be $2,000 unless the eligible family member is a veteran or has a diagnosis of dementia in which case the maximum allowable credit shall be $3,000.

Eligible family member means an individual who:

• Requires assistance with at least two activities of daily living (ADLs) as certified by a licensed health care provider
• Qualifies as a dependent, spouse, parent, or other relation by blood or marriage to the family caregiver
• Lives in a private residence and not in an assisted living, nursing facility, or residential care home

Eligible family caregiver means an individual who:

• Is providing care and support for an eligible family member
• Has a federal adjusted gross income of less than $50,000, or if filing as a married couple jointly, less than $100,000
• Has personally incurred uncompensated expenses directly related to the care of an eligible family member

To successfully address the challenges of a surging population of older adults and others living with chronic conditions—who have significant needs for long-term services and supports—Nebraska must find ways to develop methods to enable caregivers to continue to support their loved ones at home and in the community while avoiding unnecessary costs to the state’s health care system. The unpaid care of family caregivers ultimately helps save taxpayers money by delaying or preventing expensive nursing home stays and hospital visits, though often at the cost of caregivers’ own financial security. LB937 is one solution Nebraska should consider.