RELATING TO TAXATION.

HB853

HOUSE OF REPRESENTATIVES

H.B. NO.

853

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TAXATION
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.

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The legislature finds that family
caregivers are the backbone of the
long-term care
system in the State.
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AARP's 2023
report "Valuing the Invaluable" found that 154,000 residents of the
State provide unpaid caregiving services for a loved one.
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The report finds that each year, these family
caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at
a value of $2,600,000.
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Caregiving services
can range from managing personal finances and transporting for medical visits
to providing twenty-four-hour supervision and assisting with bathing,
toileting, and dressing so that their loved ones are not prematurely
institutionalized and can remain in their homes.

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The
legislature further finds that nonpaid family caregivers face many physical,
emotional, and financial challenges and often balance caregiving with work and
other personal responsibilities.
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A 2021
national study found that, on average, family caregivers spend twenty-six per
cent of their income on caregiving services; nearly eight in ten caregivers report
having routine out-of-pocket expenses related to caregiving; and that these
out-of-pocket expenses average $7,242 per year.
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The legislature believes that the demands on family caregivers are not
isolated family issues and that the State should assist in the delivery of
meaningful support and solutions for those that provide unpaid long-term care
services in the State.

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Accordingly,
the purpose of this Act is to establish a tax credit for nonpaid family
caregivers.

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SECTION
2.
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Chapter 235, Hawaii Revised Statutes,
is amended by adding a new section to be appropriately designated and to read
as follows:

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"
�235‑
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Family
caregiver tax credit.
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(a)
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Each
eligible taxpayer subject to the tax imposed by this chapter may claim a
refundable family caregiver tax credit against the taxpayer's individual income
tax liability, if any, imposed by this chapter for the taxable year in which
the credit is properly claimed.

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(b)
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The family caregiver tax credit shall be
equal to the qualified expenses of the taxpayer, up to a maximum of $5,000 in
any taxable year; provided that married individuals who do not file a joint tax
return shall only be entitled to claim the tax credit to the extent that they
would have been entitled to claim the tax credit had they filed a joint return.

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(c)
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An eligible taxpayer may claim the tax credit
for every taxable year or part thereof that the eligible taxpayer:

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(1)
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Provides care to a care recipient during
the taxable year;

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(2)
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Has personally incurred uncompensated
expenses directly related to the care of a care recipient; and

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(3)
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Has not claimed the care recipient as a
dependent for the purpose of a tax deduction in the same taxable year.

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(d)
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Only one eligible taxpayer per household may
claim a tax credit under this section for any care recipient cared for in a
taxable year.
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Only one tax credit under
this section shall be claimed by an eligible taxpayer in any one taxable year,
regardless of the number of care recipients receiving care from the eligible
taxpayer.

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(e)
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The director of taxation:

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(1)
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Shall prepare
any forms that may be necessary to claim a tax credit under this section;

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(2)
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May require the
taxpayer to furnish reasonable information to ascertain the validity of the
claim for the tax credit made under this section; and

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(3)
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May adopt rules
pursuant to chapter 91 necessary to carry out this section.

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(f)
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If the tax credit claimed by the eligible
taxpayer under this section exceeds the amount of income tax payments due from
the eligible taxpayer, the excess of credit over payments due shall be refunded
to the eligible taxpayer.
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All claims for
the tax credit under this section, including amended claims, shall be filed on
or before the end of the twelfth month following the close of the taxable year
for which the credit may be claimed.
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Failure to comply with the foregoing provision shall constitute a waiver
of the right to claim the credit.

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(g)
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The department of taxation shall report to
the legislature, no later than twenty days prior to the convening of each
regular session, on the number of eligible taxpayers claiming the tax credit
and the total cost of the tax credit under this section to the State during the
past year.

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(h)
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As used in this section:

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"Activity
of daily living" has the same meaning as defined in section 349-16.

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"Care recipient" means
an individual who:

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(1)
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Is a citizen of the United States or a
qualified alien; provided that for the purposes of this paragraph,
"qualified alien" means a lawfully admitted permanent resident under
the Immigration and Nationality Act;

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(2)
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Is not covered by any comparable government
or private home- and community-based care service, except or excluding kupuna
care services;

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(3)
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Does not reside in a long-term care
facility, such as an intermediate care facility, assisted living facility,
skilled nursing facility, hospital, adult foster home, community care foster
family home, adult residential care home, expanded adult residential care home,
or developmental disabilities domiciliary home; and

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(4)
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Has impairments of at least:

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(A)
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Two activities of daily living;

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(B)
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Two instrumental activities of daily
living;

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(C)
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One activity of daily living and one
instrumental activity of daily living; or

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(D)
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Substantive cognitive impairment requiring
substantial supervision because the individual behaves in a manner that poses a
serious health or safety hazard to the individual or another person.
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"Care
recipient" includes a person with a disability as that term is defined
under section 515-2.

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"Eligible taxpayer"
means any relative of a care recipient who:

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(1)
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Has a federal adjusted gross income of
$75,000 or less, or $125,000 if filing a joint tax return; and

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(2)
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Has undertaken the care, custody, or
physical assistance of the care recipient.

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"Instrumental
activities of daily living" has the same meaning as defined in section
349-16.

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"Kupuna
care services" has the same meaning as defined in section 349-16.

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"Qualified
expenses" means costs that are directly incurred by the eligible taxpayer
in providing care to a care recipient, including but not limited to:

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(1)
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The improvement or alteration to the
eligible taxpayer's primary residence to permit the care recipient to live in
the residence and remain mobile, safe, and independent, including entrance
ramps, safety grab bars by toilets, and the conversion of tubs to accessible
showers;

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(2)
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The purchase or lease of equipment and
supplies, including but not limited to durable medical equipment, incontinent
undergarments, and portable commodes, necessary to assist a care recipient in
carrying out one or more activities of daily living; and

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(3)
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Other paid or incurred expenses by the
eligible taxpayer that assists the eligible taxpayer in providing care to a
care recipient, such as expenditures related to:

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(A)
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Home care aides or chore workers;

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(B)
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Respite care;

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(C)
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Adult day care or adult day health center
services;

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(D)
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Personal care attendants;

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(E)
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Transportation, including but not limited
to paratransit service for non-emergency medical transport;

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(F)
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Health care equipment; and

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(G)
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Assistive technology, including emergency
alert systems and voice activated medication dispensers or reminders.
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"Relative" means a
spouse, child, parent, sibling, legal guardian, a reciprocal beneficiary as
defined in section 572C-3, a partner as defined in section 572B-1, or any other
person who is related to a care recipient by blood, marriage, or adoption,
including a person who has a hanai or substantial familial relationship to the
care recipient.
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SECTION
3.
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New statutory material is
underscored.

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SECTION 4.
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This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

DOTAX;
Family Caregiver Tax Credit; Report; Kupuna

Description:

Establishes
a refundable Family Caregiver Tax Credit for nonpaid family caregivers.
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Requires the department of taxation to report
to the legislature before the convening of each regular session.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.