S1199

An Act providing a gross income tax credit to qualified caregivers for expenses paid or incurred to provide care for a qualifying relative or individual with disabilities, and supplementing chapter 4 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 qualified caregiver shall be allowed a credit against the tax otherwise due under the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., in an amount equal to the qualified care and support expenses paid or incurred by the qualified caregiver during the taxable year for a qualifying relative or individual with disabilities, not to exceed $2,500 in a taxable year.

b. Except as otherwise provided in subsection e. of this section, to claim the credit allowed pursuant to this section, the qualified caregiver shall attach documentation to any return which the qualified caregiver is required to file under N.J.S.54A:1-1 et seq., in a form and manner prescribed by the director, substantiating the qualified care and support expenses paid or incurred by the qualified caregiver during the taxable year. Such documentation shall include, but shall not be limited to:

(1) itemized receipts or invoices from service providers that clearly identify the qualifying relative or individual with disabilities as the beneficiary;

(2) canceled checks, credit card statements, or other proof of payment corresponding to the itemized receipts or invoices;

(3) for home modification expenses, contracts and paid invoices detailing the nature of the modifications and their purpose in supporting the qualifying relative or individual with disabilities;

(4) for assistive devices, medical equipment, or supplies, certification from a licensed physician or licensed health care professional indicating the necessity of such items for the care of the qualifying relative or individual with disabilities;

(5) documentation that the qualified senior relative or individual with disabilities co-resides with the qualified caregiver, or that the qualified caregiver provides at least 120 hours of care annually to the qualified senior relative or individual with disabilities, which documentation may include a caregiver log, affidavit, or other form of verification as prescribed by the director; and

(6) any other additional requirements and procedures the director deems necessary to prevent fraud and ensure proper substantiation of qualified care and support expenses.

c. If a qualified caregiver is allowed a credit in accordance with subsection a. of this section and, during the same taxable year, is allowed a dependent deduction in accordance with paragraph 2 of subsection (b) of N.J.S.54A:3-1 for the qualifying relative or individual with disabilities whose care and support is the basis for the credit allowed in accordance with subsection a. of this section, the qualified caregiver shall be allowed to claim both the deduction and the credit in determining the tax otherwise due for the taxable year under N.J.S.54A:1-1 et seq.

d. If the credit allowed in accordance with subsection a. of this section, together with any other payments and any other credits, deductions, and adjustments allowed by law, reduces the tax liability otherwise due for the taxable year under N.J.S.54A:1-1 et seq. to zero, the amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment of tax in accordance with N.J.S.54A:9-7; provided, however, that subsection (f) of that section, concerning the allowance of interest, shall not apply.

e. A qualified caregiver who is not subject to tax in accordance with N.J.S.54A:2-4 for a taxable year shall apply for the tax credit allowed under this section using an annual application as shall be made available by the director, which application shall be filed with the director on or before the date for filing annual gross income tax returns. The director shall determine the form and manner by which a qualified caregiver shall apply for a refund of an overpayment of tax, and the time of the refund of the overpayment of tax.

f. In the event that two or more qualified caregivers provide care for the same qualifying relative or individual with disabilities, the total amount of credit claimed by all caregivers shall not exceed $2,500 in a taxable year.

g. As used in this section:

“Director” means the Director of the Division of Taxation in the Department of the Treasury.

“Disability” means, with respect to an individual, any medically-documented physical or mental impairment as defined in the federal “Americans with Disabilities Act of 1990,” 42 U.S.C. s.12101. “Licensed health care professional” means a registered nurse, licensed practical nurse, advanced practical nurse, physician assistant, physical therapist, occupational therapist, or dental hygienist licensed pursuant to Title 45 of the Revised Statues.

“Licensed physician” means a physician licensed by the State Board of Medical Examiners.

“Qualified care and support expenses” means expenses paid or incurred by a qualified caregiver for the purchase, lease, or rental of tangible personal property and services that are necessary to allow a qualifying relative or individual with disabilities to be maintained at the qualified caregiver, qualifying relative, or individual with disabilities’ permanent place of abode in this State, which property and services are provided to, or for the benefit of, the qualifying relative or individual with disabilities, or to assist the qualified caregiver in providing care and support to the qualifying relative or individual with disabilities, or are provided by an organization or an individual who is not a relative of the qualified caregiver or the qualifying relative or individual with disabilities. “Qualified care and support expenses” shall include, but shall not be limited to, expenses paid or incurred by a qualified caregiver for the purchase, lease, or rental of home health agency services, adult day care, companionship services, personal care attendant services, homemaker services, respite care, health care equipment and supplies, home modification services, services necessary to provide care and support to a qualifying relative or individual with disabilities in connection with two or more activities of daily living, assistive devices, or transportation services related to medical care or obtaining qualified care and support services. “Qualified care and support expenses” shall not include expenses paid or incurred by a qualified caregiver that are reimbursed by insurance or by a program administered by the State or federal government.

“Qualified caregiver” means a resident individual of this State who provides care and support to a qualifying relative or individual with disabilities.

“Qualifying relative” means an individual who is a relative of a qualified caregiver and who is: 65 years of age or older; or 50 years of age or older, qualifies for Social Security Disability Insurance, and has gross income for the taxable year not in excess of the New Jersey Elder Economic Security Standard Index, as reported by the Department of Human Services pursuant to P.L.2015, c.53 (C.44:15-1 et seq.), for the most recent calendar year.

“Relative” means an individual who is: (1) related by blood or adoption, including a parent, grandparent, great-grandparent, child, grandchild, great-grandchild, sibling, aunt, uncle, niece, and nephew; (2) related through marriage, civil union, or domestic partnership to an individual who is related by blood or adoption to their spouse, including the same relationships as described in paragraph (1) of this definition; or (3) an individual who has resided with the caregiver as a member of the caregiver’s household for at least 12 consecutive months immediately preceding the taxable year.

2. This act shall take effect immediately and apply to taxable years beginning on or after the January 1 next following the date of enactment.

STATEMENT

This bill provides a gross income tax credit to qualified caregivers who pay or incur qualified care and support expenses for the care and support of a qualifying relative or individual with disabilities.

A qualified caregiver would be allowed to claim a gross income tax credit in an amount not to exceed $2,500 in each taxable year for qualified care and support expenses paid or incurred by the qualified caregiver during the taxable year for the care and support of a qualifying relative or individual with disabilities. To claim the tax credit, the qualified caregiver would be required to provide documentation to substantiate that the qualified relative or individual with disabilities co-resides with the qualified caregiver, or that the qualified caregiver provides at least 120 hours of care annually to the qualified relative or individual with disabilities. If multiple caregivers provide care for the same individual, the total credit cannot exceed $2,500 for all caregivers.

The credit may be claimed in addition to the dependent deduction that may be received by the qualified caregiver for claiming the qualifying relative or individual with disabilities as a dependent on the qualified caregiver’s gross income tax return. The bill also provides that the tax credit would be refundable, meaning that if the credit reduces the qualified caregiver’s tax liability to an amount less than zero, the remainder of the credit would be refunded to the caregiver as an overpayment of tax. The bill further provides that a qualified caregiver is eligible to receive the refundable credit, even if the caregiver has gross income below the statutory minimum subject to tax.

The bill defines a “qualifying relative” as an individual who is a relative of a qualifying caregiver and who is: (1) 65 years of age or older; or (2) 50 years of age or older, qualifies for Social Security Disability Insurance, and has gross income for the taxable year not in excess of the New Jersey Elder Economic Security Standard Index. A “relative” includes individuals related by blood, adoption, marriage, civil union, or domestic partnership, including parents, grandparents, children, sibling, aunts, uncles, nieces, nephews, and step-relatives, as well as individuals who have resided with the caregiver for at least 12 consecutive months. The bill also defines “disability,” with respect to an individual, as any medically-documented physical or mental impairment as defined in the federal “Americans with Disabilities Act.”

The bill defines “qualified care and support expenses” as the expenses paid or incurred during the taxable year for the purchase, lease, or rental of tangible personal property and services that are necessary to allow the qualifying relative or individual with disabilities to be maintained at the qualified caregiver, qualifying relative, or individual with disabilities’ permanent place of abode in this State, including home health services, adult day care, respite care, medical equipment, home modifications, assistive devices, and transportation for medical care, but does not include expenses that are reimbursed by insurance or by a program administered by the State or federal government.