Hawaii 2025 Regular Session

Hawaii Senate Bill SB879 Compare Versions

Only one version of the bill is available at this time.

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1	1	THE SENATE S.B. NO. 879 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT RELATING TO TAXATION. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	THE SENATE S.B. NO. 879
4	4	THIRTY-THIRD LEGISLATURE, 2025
5	5	STATE OF HAWAII
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7	7	THE SENATE
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9	9	S.B. NO.
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11	11	879
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13	13	THIRTY-THIRD LEGISLATURE, 2025
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17	17	STATE OF HAWAII
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31	31	A BILL FOR AN ACT
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37	37	RELATING TO TAXATION.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	SECTION 1. The legislature finds that family caregivers are the backbone of the long-term care system in the State. AARP's 2023 report "Valuing the Invaluable" found that 154,000 residents of the State provide unpaid caregiving services for a loved one. The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000. Caregiving services can range from managing personal finances and transporting for medical visits to providing twenty-four-hour supervision and assisting with bathing, toileting, and dressing so that their loved ones are not prematurely institutionalized and can remain in their homes. The legislature further finds that nonpaid family caregivers face many physical, emotional, and financial challenges and often balance caregiving with work and other personal responsibilities. A 2021 national study found that, on average, family caregivers spend twenty-six per cent of their income on caregiving services; nearly eight in ten caregivers report having routine out-of-pocket expenses related to caregiving; and that these out-of-pocket expenses average $7,242 per year. The legislature believes that the demands on family caregivers are not isolated family issues and that the State should assist in the delivery of meaningful support and solutions for those that provide unpaid long-term care services in the State. Accordingly, the purpose of this Act is to establish a tax credit for nonpaid family caregivers. SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§235‑ Family caregiver tax credit. (a) Each eligible taxpayer subject to the tax imposed by this chapter may claim a refundable family caregiver tax credit against the taxpayer's individual income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. (b) The family caregiver tax credit shall be equal to the qualified expenses of the taxpayer, up to a maximum of $5,000 in any taxable year; provided that married individuals who do not file a joint tax return shall only be entitled to claim the tax credit to the extent that they would have been entitled to claim the tax credit had they filed a joint return. (c) An eligible taxpayer may claim the tax credit for every taxable year or part thereof that the eligible taxpayer: (1) Provides care to a care recipient during the taxable year; (2) Has personally incurred uncompensated expenses directly related to the care of a care recipient; and (3) Has not claimed the care recipient as a dependent for the purpose of a tax deduction in the same taxable year. (d) Only one eligible taxpayer per household may claim a tax credit under this section for any care recipient cared for in a taxable year. Only one tax credit under this section shall be claimed by an eligible taxpayer in any one taxable year, regardless of the number of care recipients receiving care from the eligible taxpayer. (e) The director of taxation: (1) Shall prepare any forms that may be necessary to claim a tax credit under this section; (2) May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and (3) May adopt rules pursuant to chapter 91 necessary to carry out this section. (f) If the tax credit claimed by the eligible taxpayer under this section exceeds the amount of income tax payments due from the eligible taxpayer, the excess of credit over payments due shall be refunded to the eligible taxpayer. All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. (g) The department of taxation shall report to the legislature, no later than twenty days prior to the convening of each regular session, on the number of eligible taxpayers claiming the tax credit and the total cost of the tax credit under this section to the State during the past year. (h) For the purposes of this section: "Activity of daily living" has the same meaning as defined in section 349-16. "Care recipient" means an individual who: (1) Is a citizen of the United States or a qualified alien; provided that for the purposes of this paragraph, "qualified alien" means a lawfully admitted permanent resident under the Immigration and Nationality Act; (2) Does not reside in a long-term care facility, such as an intermediate care facility, assisted living facility, skilled nursing facility, hospital, adult foster home, community care foster family home, adult residential care home, expanded adult residential care home, or developmental disabilities domiciliary home; and (3) Has impairments of at least: (A) Two activities of daily living; (B) Two instrumental activities of daily living; (C) One activity of daily living and one instrumental activity of daily living; or (D) Substantive cognitive impairment requiring substantial supervision because the individual behaves in a manner that poses a serious health or safety hazard to the individual or another person. "Care recipient" includes a person with a disability as that term is defined under section 515-2. "Eligible taxpayer" means any relative of a care recipient who: (1) Has a federal adjusted gross income of $75,000 or less, or $125,000 if filing a joint tax return; and (2) Has undertaken the care, custody, or physical assistance of the care recipient. "Instrumental activities of daily living" has the same meaning as defined in section 349-16. "Kupuna care services" has the same meaning as defined in section 349-16. "Qualified expenses" means out-of-pocket expenses directly incurred by the eligible taxpayer in providing care to a care recipient that have not been reimbursed, credited, paid, or otherwise covered by another individual, organization, provider, or government entity. "Qualified expenses" includes but is not limited to: (1) The improvement or alteration to the eligible taxpayer's primary residence to permit the care recipient to live in the residence and remain mobile, safe, and independent, including entrance ramps, safety grab bars by toilets, and the conversion of tubs to accessible showers; (2) The purchase or lease of equipment and supplies, including but not limited to durable medical equipment, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and (3) Other paid or incurred expenses by the eligible taxpayer that assists the eligible taxpayer in providing care to a care recipient, such as expenditures related to: (A) Home care aides or chore workers; (B) Respite care; (C) Adult day care or adult day health center services; (D) Personal care attendants; (E) Transportation, including but not limited to paratransit service for non-emergency medical transport; (F) Health care equipment; and (G) Assistive technology, including emergency alert systems and voice activated medication dispensers or reminders. "Relative" means a spouse, child, parent, sibling, legal guardian, a reciprocal beneficiary as defined in section 572C-3, a partner as defined in section 572B-1, or any other person who is related to a care recipient by blood, marriage, or adoption, including a person who has a hanai or substantial familial relationship to the care recipient." SECTION 3. New statutory material is underscored. SECTION 4. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2024. INTRODUCED BY: _____________________________
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49	49	SECTION 1. The legislature finds that family caregivers are the backbone of the long-term care system in the State. AARP's 2023 report "Valuing the Invaluable" found that 154,000 residents of the State provide unpaid caregiving services for a loved one. The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000. Caregiving services can range from managing personal finances and transporting for medical visits to providing twenty-four-hour supervision and assisting with bathing, toileting, and dressing so that their loved ones are not prematurely institutionalized and can remain in their homes.
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51	51	The legislature further finds that nonpaid family caregivers face many physical, emotional, and financial challenges and often balance caregiving with work and other personal responsibilities. A 2021 national study found that, on average, family caregivers spend twenty-six per cent of their income on caregiving services; nearly eight in ten caregivers report having routine out-of-pocket expenses related to caregiving; and that these out-of-pocket expenses average $7,242 per year. The legislature believes that the demands on family caregivers are not isolated family issues and that the State should assist in the delivery of meaningful support and solutions for those that provide unpaid long-term care services in the State.
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53	53	Accordingly, the purpose of this Act is to establish a tax credit for nonpaid family caregivers.
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55	55	SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
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57	57	"§235‑ Family caregiver tax credit. (a) Each eligible taxpayer subject to the tax imposed by this chapter may claim a refundable family caregiver tax credit against the taxpayer's individual income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.
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59	59	(b) The family caregiver tax credit shall be equal to the qualified expenses of the taxpayer, up to a maximum of $5,000 in any taxable year; provided that married individuals who do not file a joint tax return shall only be entitled to claim the tax credit to the extent that they would have been entitled to claim the tax credit had they filed a joint return.
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61	61	(c) An eligible taxpayer may claim the tax credit for every taxable year or part thereof that the eligible taxpayer:
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63	63	(1) Provides care to a care recipient during the taxable year;
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65	65	(2) Has personally incurred uncompensated expenses directly related to the care of a care recipient; and
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67	67	(3) Has not claimed the care recipient as a dependent for the purpose of a tax deduction in the same taxable year.
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69	69	(d) Only one eligible taxpayer per household may claim a tax credit under this section for any care recipient cared for in a taxable year. Only one tax credit under this section shall be claimed by an eligible taxpayer in any one taxable year, regardless of the number of care recipients receiving care from the eligible taxpayer.
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71	71	(e) The director of taxation:
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73	73	(1) Shall prepare any forms that may be necessary to claim a tax credit under this section;
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75	75	(2) May require the taxpayer to furnish reasonable information to ascertain the validity of the claim for the tax credit made under this section; and
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77	77	(3) May adopt rules pursuant to chapter 91 necessary to carry out this section.
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79	79	(f) If the tax credit claimed by the eligible taxpayer under this section exceeds the amount of income tax payments due from the eligible taxpayer, the excess of credit over payments due shall be refunded to the eligible taxpayer. All claims for the tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.
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81	81	(g) The department of taxation shall report to the legislature, no later than twenty days prior to the convening of each regular session, on the number of eligible taxpayers claiming the tax credit and the total cost of the tax credit under this section to the State during the past year.
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83	83	(h) For the purposes of this section:
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85	85	"Activity of daily living" has the same meaning as defined in section 349-16.
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87	87	"Care recipient" means an individual who:
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89	89	(1) Is a citizen of the United States or a qualified alien; provided that for the purposes of this paragraph, "qualified alien" means a lawfully admitted permanent resident under the Immigration and Nationality Act;
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91	91	(2) Does not reside in a long-term care facility, such as an intermediate care facility, assisted living facility, skilled nursing facility, hospital, adult foster home, community care foster family home, adult residential care home, expanded adult residential care home, or developmental disabilities domiciliary home; and
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93	93	(3) Has impairments of at least:
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95	95	(A) Two activities of daily living;
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97	97	(B) Two instrumental activities of daily living;
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99	99	(C) One activity of daily living and one instrumental activity of daily living; or
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101	101	(D) Substantive cognitive impairment requiring substantial supervision because the individual behaves in a manner that poses a serious health or safety hazard to the individual or another person.
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103	103	"Care recipient" includes a person with a disability as that term is defined under section 515-2.
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105	105	"Eligible taxpayer" means any relative of a care recipient who:
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107	107	(1) Has a federal adjusted gross income of $75,000 or less, or $125,000 if filing a joint tax return; and
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109	109	(2) Has undertaken the care, custody, or physical assistance of the care recipient.
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111	111	"Instrumental activities of daily living" has the same meaning as defined in section 349-16.
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113	113	"Kupuna care services" has the same meaning as defined in section 349-16.
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115	115	"Qualified expenses" means out-of-pocket expenses directly incurred by the eligible taxpayer in providing care to a care recipient that have not been reimbursed, credited, paid, or otherwise covered by another individual, organization, provider, or government entity. "Qualified expenses" includes but is not limited to:
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117	117	(1) The improvement or alteration to the eligible taxpayer's primary residence to permit the care recipient to live in the residence and remain mobile, safe, and independent, including entrance ramps, safety grab bars by toilets, and the conversion of tubs to accessible showers;
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119	119	(2) The purchase or lease of equipment and supplies, including but not limited to durable medical equipment, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and
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121	121	(3) Other paid or incurred expenses by the eligible taxpayer that assists the eligible taxpayer in providing care to a care recipient, such as expenditures related to:
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123	123	(A) Home care aides or chore workers;
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125	125	(B) Respite care;
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127	127	(C) Adult day care or adult day health center services;
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129	129	(D) Personal care attendants;
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131	131	(E) Transportation, including but not limited to paratransit service for non-emergency medical transport;
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133	133	(F) Health care equipment; and
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135	135	(G) Assistive technology, including emergency alert systems and voice activated medication dispensers or reminders.
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137	137	"Relative" means a spouse, child, parent, sibling, legal guardian, a reciprocal beneficiary as defined in section 572C-3, a partner as defined in section 572B-1, or any other person who is related to a care recipient by blood, marriage, or adoption, including a person who has a hanai or substantial familial relationship to the care recipient."
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139	139	SECTION 3. New statutory material is underscored.
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143	143	SECTION 4. This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2024.
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147	147	INTRODUCED BY: _____________________________
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149	149	INTRODUCED BY:
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157	157	Report Title: Kupuna Caucus; DOTAX; Family Caregiver Tax Credit; Report Description: Establishes a refundable Family Caregiver Tax Credit for nonpaid family caregivers. Requires the Department of Taxation to report to the Legislature before the convening of each Regular Session. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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165	165	Report Title:
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167	167	Kupuna Caucus; DOTAX; Family Caregiver Tax Credit; Report
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171	171	Description:
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173	173	Establishes a refundable Family Caregiver Tax Credit for nonpaid family caregivers. Requires the Department of Taxation to report to the Legislature before the convening of each Regular Session.
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181	181	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.