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Tax department warns refundable caregiver credit would be hard to administer
Summary
Deputy Commissioner Rebecca Samraff told a committee of conference that verifying eligibility for a proposed refundable caregiver tax credit—specifically unpaid status, 20 hours per week of care and medical need—would create administrative and privacy challenges and may be better handled as a human services program.
At a committee of conference meeting, the Department of Taxes told senators the proposed refundable caregiver tax credit raises verification and privacy problems that could make tax administration difficult.
Rebecca Samraff, deputy commissioner at the Department of Taxes, told the committee that the department can reliably verify the presence of income but cannot easily verify the absence of income or attestations about unpaid caregiving time. “We're really good at verifying the presence of income, not so much the absence of it,” she said, adding that the 20-hours-per-week threshold and the unpaid‑caregiver requirement would be “impossible to verify, you know, beyond an attestation.”
The draft bill discussed by the committee would make the credit refundable and contemplates a medical note verifying that the care recipient needs assistance with activities of daily living. Samraff warned that accepting such documentation would require the department to handle sensitive medical information about a third party, and that doing so could be “a little ... awkward” for staff and invasive for families. “We would be receiving very sensitive medical information about an individual who is not even the taxpayer, not the person that's claiming the credit. It's about a third party,” she said.
Samraff and other tax staff suggested several concerns: verifying unpaid status within a household (since unpaid care is often informal and not recorded on wages), confirming hours of care (attestation versus objective proof), and limiting duplicate claims (the bill contains no explicit cap on how many family members can claim a credit for the same individual). She suggested the program’s intent is compelling but said it “maybe [is] something that could be done more effectively as, like, a direct human services program rather than through the tax department.”
Committee members asked about overlap with existing programs such as Choices for Care, administered by the Agency of Human Services, and whether paid caregivers under Medicaid could be disqualified from also receiving the credit. Tax staff said they had not fully assessed program overlap and recommended further study and summer work to design administrable verification processes before any refundable credit is implemented.
No formal motion or vote occurred on the caregiver credit during the meeting; members asked the tax department to return with implementation options and more information on verification, data sources, and privacy protections.
