Under the new provisions, individuals filing single returns can qualify for the credit up to a federal taxable income of $100,000, while joint filers will have a similar threshold established. Additionally, the maximum credit amount claimed per policy will increase from $150 to $300, with provisions for annual inflation adjustments in both income limits and credit amounts. This change not only incentivizes purchasing long-term care insurance but also reflects a broader effort to adapt state tax policy to current economic conditions.
Summary
House Bill 1122 proposes modifications to the state income tax credit for purchasing long-term care insurance, effective for income tax years beginning January 1, 2024. The legislation aims to enhance accessibility to such insurance by increasing the income qualification thresholds for taxpayers and doubling the existing tax credit limits. This is intended to encourage more residents to invest in long-term care insurance, thereby alleviating potential financial burdens related to long-term care needs in the future.
Contention
Discussion surrounding HB1122 may include concerns over fiscal impacts on state revenue due to increased tax credits. While proponents argue that enhancing the credit will provide more individuals with necessary financial tools for long-term care, critics may express worries about the sustainability of such tax credits and the potential strain on the state budget. The implications of raising income thresholds and credit amounts may spark debate on whether the benefits achieved through the bill will outweigh the anticipated costs.