A5723

An Act providing a gross income tax credit for certain expenses paid or incurred by a qualified caregiver for the care and support of a qualifying senior family member, 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 for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 100 percent of the qualified care expenses paid or incurred by the qualified caregiver during the taxable year for the care and support of a qualifying senior family member. No taxpayer shall be eligible for the credit allowed by this subsection unless the taxpayer files with the taxpayer’s tax return a letter of medical necessity that is signed by a physician and that provides that during the taxable year, the taxpayer provided assistance to the qualifying senior family member with at least three of the following activities: (1) bathing and grooming; (2) dressing and undressing; (3) meal preparation and feeding; (4) functional transfers; (5) safe restroom use and assistance with continence; (6) ambulation; or (7) memory care and stimulation. The credit allowed by this subsection for a taxable year shall not exceed $2,500 for the qualified care expenses paid or incurred by the qualified caregiver for one qualifying senior family member or $5,000 for the qualified care expenses paid or incurred by the qualified caregiver for two or more qualifying senior family members.

b. If two or more qualified caregivers maintain residency at the same permanent place of abode in this State and each qualified caregiver is allowed a credit in accordance with subsection a. of this section for the same qualifying senior family member, the total amount of the credit allowed shall be allocated in equal amounts between each of the qualified caregivers unless the qualified caregivers submit an agreement in writing to the director establishing a different allocation.

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 senior family member 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. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall be as prescribed by the director. The amount of the credit applied against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq., together with any other credits allowed by law, shall not reduce a taxpayer’s New Jersey gross income tax liability to an amount less than zero.

e. As used in this section:

"Physician" means an individual licensed to practice medicine and surgery in this State.

"Qualified care 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 senior family member to be maintained within or at the qualified caregiver’s permanent place of abode in this State, which property and services are provided to or for the benefit of the qualifying senior family member or to assist the qualified caregiver in providing care and support to the qualifying senior family member or are provided by an organization or an individual who is not a relative of the qualified caregiver or the qualifying senior family member. "Qualified care 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 senior family member in connection with two or more daily living activities, or assistive devices. "Qualified care 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 taxpayer who pays for or incurs qualified care expenses on behalf of a qualifying senior family member.

"Qualifying senior family member" means an individual who:

is 60 years of age or older;

is a relative of the qualified caregiver; and

resides in the qualified caregiver’s permanent place of abode in this State for not less than six months of the taxable year.

A "qualifying senior family member" shall include an individual who meets the qualifications enumerated in this definition of a qualifying senior family member but who occupies a separate room or rooms within or located on the same property as the qualified caregiver’s permanent place of abode in this State, including a separate room or rooms that comprise a self-contained living arrangement commonly referred to as a secondary suite or mother-in-law apartment. A "qualifying senior family member" shall not include a tenant, subtenant, roomer, or boarder who pays rent or is charged a fee for the occupancy of a room or rooms within or located on the same property as the qualified caregiver’s permanent place of abode in this State.

"Relative" means an individual related by consanguinity within the third degree as determined by the common law or an individual related to a spouse or a partner to a civil union or domestic partnership within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.

2. Notwithstanding any provision of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the director may adopt, immediately upon filing with the Office of Administrative Law and no later than the 90th day after the effective date of this act, such rules and regulations as the director deems necessary to implement the provisions of this act, which regulations shall be effective for a period not to exceed 18 months. The regulations shall thereafter be amended, adopted, or readopted by the director in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

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

STATEMENT

This bill provides a nonrefundable gross income tax credit to qualified caregivers (caregivers) in an amount equal to the qualified care expenses paid or incurred by the caregiver during the taxable year for the care and support of a qualifying senior family member (senior family member) who resides at the caregiver’s permanent place of abode in this State. The bill caps the maximum amount of each credit per taxable year at $2,500 for the qualified care expenses paid or incurred by the caregiver for one senior family member and $5,000 for the qualified care expenses paid or incurred by the caregiver for two or more senior family members.

The bill provides that if multiple caregivers maintain residency at the same permanent place of abode in this State and each caregiver is allowed a credit for qualified care expenses of the same senior family member, the credit allowed will be allocated in equal amounts between or among the caregivers. The bill provides that the credit is in addition to the benefit of the deduction that may be received by the caregiver for claiming the senior family member as a dependent on the caregiver’s gross income tax return.