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NE lawmakers consider tax credits for family caregivers

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Wednesday, February 7, 2024   

About 180,000 Nebraskans are caregivers for a family member.

Nationally, family caregivers spend an average of more than $7000 a year on related expenses. A bill in the Nebraska Legislature would help offset some of those expenses.

Legislative Bill 937, introduced by Sen. Eliot Bostar of Lincoln, provides eligible caregivers a state tax credit equal to 50% of eligible expenses for a maximum yearly credit of $2,000, or $3,000 if caring for a family member who is a veteran or has dementia.

Jina Ragland, associate state director of advocacy and outreach for AARP Nebraska, called family caregivers the "backbone" of the state's long-term care system, especially with the current workforce shortage.

"We are relying more and more on our family caregivers, who are unpaid, and many of them are carrying full-time jobs," Ragland pointed out. "To honor their loved ones, and to help them stay in place and age in place, we are relying more on them to provide that type of care."

The bill has an adjusted gross income cap of $50,000 for single caregivers and $100,000 for married caregivers. The person being cared for would need help with at least two activities of daily living, such as eating, dressing and personal hygiene. The Revenue Committee held the first hearing on the bill Jan. 26, but has not yet taken action. As of 2023, six states offered some form of family caregiver tax credit.

Such caregiving expenses as home modifications, medical equipment, a home-health aide, adult day care and respite care would qualify under the measure. Ragland noted nearly half of family caregivers report financial setbacks, as they tap into their own savings, work fewer hours, or reduce what they save for their own retirement.

"Any time employed family caregivers are forced to leave the workforce, or reduce their hours to fulfill caregiving duties, it can result in a loss of income, retirement savings, benefits and career mobility," Ragland outlined.

Ragland pointed out Nebraska family caregivers save the state nearly $3 billion in care costs annually. She stressed they will only become more important as the population ages.

"Because our workforce can't keep up and be sustainable," Ragland contended. "We have to rely more on family caregivers and finding ways to provide them support, so they can continue to not only care for their loved ones at home, but also be sustainable in the community and keep working as well."

A bipartisan bill was introduced in Congress in January, which would provide a federal tax credit of up to $5000 for eligible family caregivers.

Disclosure: AARP Nebraska contributes to our fund for reporting on Budget Policy and Priorities, Consumer Issues, Health Issues, and Senior Issues. If you would like to help support news in the public interest, click here.


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