Sponsored by:
Senator JAMES W. HOLZAPFEL
District 10 (Monmouth and Ocean)
Senator PATRICK J. DIEGNAN, JR.
District 18 (Middlesex)
SYNOPSIS
Provides gross income tax deduction for senior citizens for certain medical expenses for in-home care or care in assisted living and long-term care facilities and funeral expenses.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a gross income tax deduction for senior citizens for certain medical expenses for in-home care or care in assisted living and long-term care facilities and funeral expenses, supplementing chapter 3 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer who is 62 years of age or older, blind, or disabled shall be allowed to deduct from the taxpayer's gross income medical expenses, not to exceed $50,000, paid during the taxable year by the taxpayer for the care of the taxpayer, the taxpayer's spouse, and the taxpayer's dependents, if those individuals are 62 years of age older, blind, or disabled, provided that the expenses are for qualified long-term care services. For purposes of this act, “qualified long-term care services” means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, which are required by a chronically ill individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.
b. Any amounts allowed as a deduction under this section shall not be allowed for amounts that are reimbursable to the taxpayer and shall not be allowed if the amounts are allowed as a deduction for medical expenses under N.J.S.54A:3-3.
2. a. A taxpayer who is 62 years of age or older, blind, or disabled shall be allowed to deduct from the taxpayer's gross income unreimbursed funeral expenses, not to exceed $50,000, paid during the taxable year by the taxpayer for the funeral of the taxpayer's spouse or the taxpayer's dependents, if those individuals were 62 years of age or older, blind, or disabled at the time of death.
b. Any amounts allowed as a deduction under this section shall not be allowed for amounts that are reimbursable to the taxpayer.
3. This act shall take effect immediately.
STATEMENT
This bill provides a gross income tax deduction for senior citizens and for blind and disabled individuals for certain unreimbursed qualified long-term care expenses, not to exceed $50,000, paid by the taxpayer for the care of the taxpayer or the taxpayer’s spouse or dependent who is also a senior or blind or disabled individual. This bill addresses a financial concern for senior citizens and others who have to pay gross income tax on income that they receive from long-established savings and investments that are then expended to pay for their residence-based medical care, nursing care, and maintenance or personal care. Qualified long-term care expenses are defined the same as for purposes of the federal medical expenses deduction, and include services provided for in-home care and care provided in assisted living and long-term care facilities for chronically ill and disabled individuals. They include a variety of services provided through a variety of service providers that are necessary diagnostic, therapeutic, curing, treating, mitigating, rehabilitating, and maintenance and personal care services required by such an individual and are provided pursuant to a plan of care prescribed by a licensed health care practitioner. This deduction will allow these taxpayers to avoid tax on the income they pay for their own medical care that is delivered in their home or in an assisted living and long-term care facility. The medical expenses allowed for this deduction may not be claimed also under the existing statutory gross income tax deduction for medical expenses.
This bill also provides a gross income tax deduction for senior citizens, blind individuals, and disabled individuals for unreimbursed funeral expenses, not to exceed $50,000, paid by the taxpayer for the funeral of the taxpayer's spouse or the taxpayer's dependents, if those individuals were 62 years of age or over, blind, or disabled at the time of death. This deduction addresses the financial concern of elderly and disabled taxpayers who are faced with using income from life-long savings and investments to pay for the funeral expenses of close family members.