LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7306 NOTE PREPARED: Jan 13, 2025
BILL NUMBER: SB 339 BILL AMENDED:
SUBJECT: Caregiver Tax Credit.
FIRST AUTHOR: Sen. Young M BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
FEDERAL
Summary of Legislation: The bill provides that a qualified taxpayer is entitled to a credit against the
qualified taxpayer's state income tax liability in a taxable year equal to the lesser of:
(1) the value of qualified services that the qualified taxpayer performed in the immediately preceding
taxable year; or
(2) $10,000 (or $5,000 in the case of a married individual filing a separate return).
The bill provides that "qualified services" means services, as determined by the Office of the Secretary of
Family and Social Services (FSSA), that a qualified taxpayer performs in caring for an ill or aging qualified
family member that the qualified taxpayer otherwise would have compensated a third-party caregiver to
perform. The bill provides that the term does not include services that would otherwise be required to be
performed by a licensed physician, a licensed nurse, or other medical professional.
The bill requires the FSSA to:
(1) develop criteria that a service must satisfy to be considered a qualified service;
(2) derive a formula, using published industry data and standards, to determine the value of the
qualified services performed by a qualified taxpayer during a taxable year; and
(3) adopt any other guidelines necessary to allow or disallow a credit.
It requires a qualified taxpayer to submit to the FSSA all relevant information regarding the performance of
qualified services necessary for the FSSA to determine the value of the qualified services. It also requires
the FSSA to notify a qualified taxpayer in writing the value of the services that the qualified taxpayer
performed for purposes of claiming the credit.
Effective Date: July 1, 2025.
Explanation of State Expenditures: FSSA: The bill’s requirements represent an additional workload [and/or
expenditure] on the agency outside of the agency’s routine administrative functions, and existing staffing and
resource levels, if currently being used to capacity, may be insufficient for full implementation. The
SB 339 1 additional funds and resources required could be supplied through existing staff and resources currently
being used in another program or with new appropriations. Ultimately, the source of funds and resources
required to satisfy the requirements of this bill will depend on legislative and administrative actions.
The bill requires the FSSA to determine which services performed by family caregivers would be eligible
for the tax credit. The FSSA is also required to evaluate information submitted by taxpayers, determine the
value of services provided by family caregivers, and adopt other guidelines necessary to allow or disallow
a credit.
Department of State Revenue (DOR): The DOR would incur some administrative expenses relating to the
revision of tax forms, instructions, and computer programs to reflect the changes made in the bill. The DOR’s
current level of resources should be sufficient to implement these changes.
Explanation of State Revenues: The bill establishes a nonrefundable individual adjusted gross income
(AGI) tax credit for taxpayers who provide care for an ill or aging family member. The credit would reduce
state General Fund revenue by a indeterminable but substantial amount beginning in FY 2027. The credit
would be available beginning in tax year 2026. The revenue impact will depend on which services FSSA
defines as qualified services and how they price the value of qualified services.
Additional Information - The credit amount is equal to the lesser of $10,000, or $5,000 in the case of a
married individual filing separately, or the value of services performed by the taxpayer in the preceding
taxable year. A credit award may not exceed the taxpayer’s state income tax liability and may not be carried
forward or refunded. A tax filer would have to have Indiana taxable income of $339,000 in tax year 2026 in
order to have sufficient Indiana tax liability to receive the maximum credit amount of $10,000.
Indiana has two waivers that provide home- and community-based services (HCBS) to people who are
income and condition eligible. The number of applicants exceed the number of waiver slots available in the
waivers. Approximately 12,000 individuals are on waiting lists for waiver services and may be providing care
services to family members. If family members provide additional services to a family member who receive
waiver services, 68,000 individuals either on the waivers or the waiting lists could be providing care for a
family member. If additional taxpayers providing care for family members apply for the credit who are not
on the waiting lists or receiving waiver services, the numbers would be higher.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Department of State Revenue; Family and Social Services Administration.
Local Agencies Affected:
Information Sources: FSSA.
https://www.in.gov/fssa/ddrs/information-for-individuals-and-families/hcbs-waiver-waiting-list-information/
Fiscal Analyst: Camille Tesch, 317-232-5293.
SB 339 2