Some Oklahoma residents will qualify for a new tax credit starting next year. Specifically, this new tax credit from Oklahoma is for caregivers who provide care to an eligible family member. This tax credit could allow eligible caregivers to save up to $3,000.
New tax credit from Oklahoma: who will get it?
Lawmakers passed the Caring for Caregivers Act during the 2023 Oklahoma legislative session, making Oklahoma the first state to implement an expansive tax credit for family caregivers. It will take effect on Jan. 1, 2024, i.e., for the 2024 tax year.
This tax credit covers the out-of-pocket costs incurred by an unpaid family caregiver. Moreover, the expenses incurred by the caregiver must directly relate to assisting the family caregiver in taking care of the eligible family member.
To qualify for the new tax credit from Oklahoma:
- Care receiver must be 62 years or older, as well as need assistance with at least two activities of daily living (ADLs), which must be certified by a licensed health care provider.
- Caregiver must have a federally adjusted gross income below $50,000 (below $100,000 for a couple filing jointly). Also, the caregiver must incur uncompensated expenses directly related to the care of an eligible family member.
- Care receiver must be a dependent, parent, spouse or in any other way, by blood or marriage relation to the family caregiver.
- The care must be provided in a private residential home without any assistance from a nursing facility, or residential care home.
Caring for Caregivers Act: how much money to expect
Expenses incurred or paid by a caregiver for the hiring of a home care aide, adult day care, respite care, personal care attendants, health care equipment, and technology qualify for the credit. Moreover, the purchase or lease of equipment that is necessary to perform one or more activities of adult daily living (ADL) qualify for the new tax credit from Oklahoma.
A point to note is that the Caring for Caregivers Act doesn’t cover prescription or over-the-counter drugs. This is because most individuals who receive care are Medicare recipients and at least some part of their medications is already covered.
The maximum credit that one could get is $2,000 per year. However, those who take care of veterans or those with dementia-related diagnoses can receive up to $3,000 with the new tax credit from Oklahoma. The Legislature caps the amount of tax credits at $1,500,000 annually.
The caregiver tax credit from Oklahoma is a much-needed relief. Oklahoma residents who take care of a veteran, on average use $11,500 for caregiving. This number is 1.5 times more than what other family caregivers spend, according to a study.
Separate AARP research with the National Alliance for Caregiving found that 43% of veteran and military caregivers struggle financially as they take on debt or use their personal savings in providing care.
