Personal income taxes: credit: family caregiver.
The legislation recognizes the significant burden placed on family caregivers, noting that many caregivers contribute substantial amounts of money—averaging approximately $6,954 annually—to cover the costs of care. With California experiencing a rising population of older adults and individuals requiring chronic care, the bill aims to mitigate the financial strain on families and encourage caregivers to support their loved ones in a home setting. The bill obligates the Franchise Tax Board to oversee the allocation of these credits and ensures they are distributed on a first-come, first-served basis until the annual cap is met.
Assembly Bill 2136 seeks to provide financial relief to family caregivers in California by establishing a tax credit for expenses incurred during the caring of eligible family members with long-term care needs. Specifically, the bill allows caregivers to claim a credit equal to 50% of their out-of-pocket expenses, up to $5,000 per year, from the 2021 tax year through to 2026. The proposed credit is intended to alleviate the financial stress incurred by millions of Californians who provide care to individuals with limitations in daily activities.
While the bill presents benefits, the inclusion of provisions that expand the scope of perjury related to the certification of eligible family members could raise concerns regarding implementation and enforcement. Moreover, discussions on funding mechanisms have indicated that the aggregate credit allocation is capped at $150 million annually, which may limit the reach of the support offered under this measure. Nevertheless, the bill does not require reimbursement to local agencies or school districts for any costs arising from its implementation, which might provoke discussions about shared responsibilities in addressing caregiving challenges across the state.