SENATE PROPOSES $65 MILLION ELDER CARE TAX CREDIT

Monday, March 12, 2001

The Senate Majority is proposing that people who care for elderly relatives in their home receive a state personal income tax credit to help offset the costs of providing care. Senate Majority Leader Joseph L. Bruno and Senator George Maziarz (R-C, North Tonawanda), Chairman of the Senate Committee on Aging, announced that the Elder Care Tax Credit, which would provide a total of $65 million in tax relief, will be part of a comprehensive tax cut package included in the Senate Budget Resolution.

"For many people, caring for an elderly relative in their home is a labor of love, but it is also a major commitment of time and money," Senator Bruno said. "Our proposal would relieve some of the financial impact on families by allowing them to receive a personal income tax credit to help offset more than half the average cost of providing care."

Currently, the Federal government and New York State provide a credit for child and dependent care expenses. However, the dependent care credit only applies to care for the elderly if the elderly person is disabled and a dependent of the taxpayers. The Senate plan would expand the program to allow a credit against personal income tax liability of 20 percent of the expenses incurred for the care of an elderly relative living with the taxpayer.

"This is a very unique proposal because only one other state, North Dakota, allows for a tax credit for the expenses of caring for an elderly family member that is not a dependent," Senator Maziarz said. "It's estimated that 1.5 million households in New York State provide care for a family member and over half of them spend a portion of their income on caregiver expenses. This tax credit would help cover some of those expenses."

"Many families have to stretch their budgets even tighter to incorporate the costs associated with caring for an elderly relative in their home," Senator Maziarz said. "For these families the need to ensure quality care for a loved one far outweighs concerns about the cost of providing care. The Senate tax credit proposal would help alleviate the cost concerns so families can focus even more on providing the best possible care."

The following are examples of the average cost of care giving expenses:

> Home care (personal services) - $100 per day
> Home health care (nurse visit) - $85 per visit
> Adult day care - $45 per day
> Medication reminder service - $20 per month
> Emergency response service- $35-$50 per month
> Meal delivery program - $2-$5 per day

New Yorkers who care for an elderly relative at home spend an average of $375 per month, or $4,500 per year on care services. The total statewide cost is estimated at $760 million. The average annual household income for a caregiver is $45,000.

The expenses that could qualify for the credit would be limited to $2,400 a year, or more than half of the average annual cost of providing care. The credit, which will be phased in over the next several years, would apply to taxpayers with annual incomes up to $60,000 for single filers and up to $75,000 for married, joint filers.

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