Committee narrows unpaid caregiver tax credit; staff to brief on $1,000 starting level

The Senate Finance Committee on an item identified as S.51 reviewed an unpaid caregiver tax credit proposal and directed staff to prepare the measure with a $1,000 starting credit while scheduling a fiscal briefing before taking further action.

Lawmakers said the proposal aims to compensate family members who provide at least 20 hours per week of uncompensated care to a relative with a medically diagnosed condition, but they flagged costs and verification questions that could make a broader credit unaffordable.

Committee chair (unnamed) opened the discussion by noting the committee had two bills that week and that S.51 concerns an "unpaid caregiver tax credit." Kirby, a bill presenter, reviewed the bill language and the mechanics of the proposed credit, saying the bill requires a claimant to provide at least 20 hours per week of uncompensated care for an individual who: is related to the caregiver, needs assistance with activities of daily living (ADLs) or home health care, has a medically diagnosed disability or health condition, and does not reside in a nursing home.

Patrick, the committee fiscal analyst, told members the initial population estimate of 70,000 potential claimants had been narrowed through data triangulation to about 6,300 likely eligible claimants under the bill's 20-hour threshold and income criteria. Using the as‑introduced $2,500 maximum credit, Patrick estimated a fiscal cost of roughly $15,000,000 and an average credit of about $2,379 per claimant. He said lowering the credit to $1,000 would reduce the fiscal exposure to about $6,000,000.

Kirby described a proposed compliance mechanism: a short form to be completed by a licensed medical professional that would attest the care recipient has a medical diagnosis requiring assistance with ADLs and that the claimant provides at least 20 hours of care per week. The form would not require the provider to list a diagnosis and must be retained by the claimant for three years to align with the department's audit period.

Committee members pressed on eligibility definitions (whether unmarried partners and non‑family caregivers would be included), how hours would be counted (daytime care, overnight care, or subjective claimant reporting), and administrative burden for the Department of Taxes. Rebecca from the Department of Taxes was cited in discussion about auditability and comparisons to the child and dependent care credit, which typically requires documentation of expenses and can be audited using provider records or birth certificates.

Multiple members said the committee should start with a more modest credit amount so the program could be evaluated and expanded later. Committee chair proposed "start with the thousand dollar credit" and the committee directed staff to draft language reflecting that level and to invite Joint Fiscal Office (JFO) staff for a briefing. The committee also discussed alternatives such as an expense‑reimbursement approach (reimbursable eligible expenses rather than a straight credit) and the tradeoffs of itemization, administration, and equitable reach across income levels.

The session closed with members asking staff to solicit additional data from stakeholders such as the Alzheimer's Association and to return with a JFO briefing on the budget implications and likely revenue impacts before the committee advances a bill.

The committee did not take a formal roll‑call vote on S.51 during this meeting; members instructed staff to draft an amendment reflecting a $1,000 credit and to return with fiscal analyses and potential language to broaden or narrow eligibility.