$3,000 Caregiver Tax Credit from Nebraska Signed into Law

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Family caregivers in Nebraska will now qualify for a nonrefundable tax credit going forward for eligible expenses incurred while taking care of a loved one. Eligible persons can get a Caregiver Tax Credit from Nebraska of up to $3,000. This new tax credit will be available to residents starting next year.

How much money can a caregiver get?

On Tuesday, Governor Jim Pillen signed the Caregiver Tax Credit Act (Legislative Bill 937). The Caregiver Tax Credit from Nebraska aims to help family members and caregivers deal with financial setbacks.

Lawmakers approved Legislative Bill 937 by a 45-0 vote during the final legislative day on April 18. The credit equals 50% of eligible expenditures for a family member’s care or support during the tax year. The expenses must directly relate to care and must not include general household maintenance expenses, such as electrical, plumbing and painting repairs.

A caregiver can claim up to $2,000 in credit per fiscal year, or up to $3,000 if the patient is a veteran or is diagnosed with dementia. If two or more caregivers claim credit for the same member, the credit amount will be divided between caregivers. Up to $1.5 million in Caregiver Tax Credit could be claimed each year through June 30, 2027.

Despite the credit, caregivers still need to pay qualifying expenses, such as home health, doctor visits and medical supplies, from their own pocket. However, they must retain the receipts to get reimbursed when filing taxes.

Caregiver Tax Credit from Nebraska: who will get it?

AARP Nebraska estimates the number of family caregivers to be around 179,000, offering more than 168 million hours of unpaid care valued at about $2.8 billion every year. Though caregivers care for family members out of love and affection, its real financial cost is estimated to be more than $7,200 per household per year on average.

To qualify for a Caregiver Tax Credit from Nebraska, the AGI (adjusted gross income) of a caregiver must be below $50,000 (or $100,000 if filing as a married couple jointly).

Also, the caregiver must be taking care of a relative who needs assistance with at least two daily living activities, as certified by a healthcare provider. Another requirement is that the family member or a relative must live in a private residence, not a nursing, assisted living, or any residential care facility.

Nebraska now becomes the second state – the first being Oklahoma – to introduce a caregiver tax credit. A similar bill from Oklahoma went into effect earlier this year. Unlike Oklahoma’s credit, the Caregiver Tax Credit from Nebraska doesn’t have any age requirement for eligible family members, meaning people of all ages can receive care at home.

Visit the Nebraska Department of Revenue’s website for more information on the Caregiver Tax Credit.