Nebraska Governor Signs Caregiver Tax Credit Act into Law

Nebraska Governor Jim Pillen signed the Caregiver Tax Credit Act (Legislative Bill 937) into law on Tuesday, April 23, 2024, that would provide a nonrefundable tax credit to any family caregiver who incurs eligible expenditures for the care and support of an eligible family member.

Todd Stubbendieck, State Director for AARP Nebraska, shared, “We’re excited to see the state of Nebraska recognize this critical need for family caregivers and take action to put into law one of the most comprehensive caregiver tax credits in the nation.”

The caregiver tax credit is 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. An eligible family caregiver is an individual providing care and support for the eligible family member and has a federal adjusted gross income of less than $50,000, or if filing as a married couple jointly, less than $100,000. The first two years of the tax credit would cap the amount available at $1.5 million with an increase in year three to $2.5 million.

Jina Ragland, Associate State Director of Advocacy and Outreach for AARP Nebraska, stated, “This is a huge win for Nebraska caregivers. AARP will be putting a focus on informing the public on how to best prepare for the 2025 tax year so eligible households can utilize this credit.”

The need for caregivers is expected to continue to grow with increases in the U.S. older adult population. As people live longer and may face chronic health conditions or disabilities, the number of people who need or will need caregiving assistance continues to grow. Today, Nebraska’s 179,000 family caregivers provide over 168 million hours of care valued at a staggering $2.8 billion, which helps mitigate more costly taxpayer-funded long-term care and nursing home stays.

Nearly half of family caregivers (47%) experienced at least one financial setback, such as having to dip into their personal savings, cut back on their own health care spending, or reduce how much they save for their retirement. Employed family members may be forced to leave the workforce or reduce their hours to fulfill caregiving duties which can result in loss of income, retirement savings, benefits, and career mobility.

We must continue to find ways to develop methods to enable caregivers to continue to support loved ones at home and in the community and avoid unnecessary costs to the state’s health care system. Nebraska’s new Caregiver Tax Credit Act is a step in the right direction.