HB355 HD1

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235‑ Caregiver tax credit. (a) There shall be allowed a refundable caregiver tax credit to each eligible taxpayer subject to the tax imposed by this chapter, who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes, and who files an individual net income tax return for a taxable year.

(b) The refundable caregiver tax credit shall be $1000; provided that the total amount of tax credits provided per year shall not exceed $ ; provided further that the tax credit shall be paid out in the order in which the tax credits are claimed until exhausted.

(c) The credit allowed under this section shall be claimed against net income tax liability for the taxable year. For the purpose of deducting the tax credit, "net income tax" liability means net income tax liability reduced by all other credits allowed the taxpayer under this section.

(d) An eligible taxpayer may claim the tax credit for every taxable year that the eligible taxpayer provides care to a care recipient. Only one caregiver per household may claim a tax credit for any care recipient cared for in a taxable year. An eligible taxpayer may not claim multiple tax credits under this section in a taxable year, regardless of the number of care recipients receiving care from the eligible taxpayer. For the purposes of this subsection, "taxable year" that the eligible taxpayer provides care to a care recipient refers to a care recipient who has resided with the taxpayer for at least nine months in the year the tax credit is claimed.

(e) If the tax credit claimed by the taxpayer under this section exceeds the amount of income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1.

(f) Every claim, including amended claims, for the tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to meet the filing requirements of this subsection shall constitute a waiver of the right to claim the tax credit.

(g) The director of taxation shall prepare such forms as may be necessary to claim a tax credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to effectuate the purposes of this section.

(h) The department shall report to the legislature annually, no later than twenty days prior to the convening of every regular session, on the number of taxpayers claiming the tax credit and the total cost of the tax credit to the State during the past year.

(i) Pursuant to applicable confidentiality laws, the department shall assist the executive office on aging to provide information on caregiver services to each taxpayer who claims the tax credit; provided that the department shall act as a conduit for information sent from the executive office on aging to caregivers.

(j) As used in this section:

"Eligible taxpayer" means a caregiver who cares for a qualified care recipient.

"Qualified care recipient" means a person who is sixty years of age or older, a citizen or resident alien of the United States, and a relative of the caregiver who:

(1) Has co-resided with the caregiver at least six months of the taxable year for which the credit is claimed or has received more than fifty per cent of the qualified care recipient's financial support during the taxable year from the caregiver; and

(2) Is certified by a licensed physician or advanced practice registered nurse as requiring one of the following:

(A) Substantial supervision to protect the qualified care recipient from threat to health or safety due to cognitive impairment; or

(B) Substantial assistance to perform at least two of the following activities of daily living:

(i) Bathing;

(ii) Eating;

(iii) Using the toilet;

(iv) Dressing; or

(v) Transferring, such as from bed to wheelchair.

"Relative" means a spouse, child, parent, sibling, legal guardian, a reciprocal beneficiary as that term is defined in section 572C-3, or any other person who is related by blood, marriage, or adoption."

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $ , or so much thereof as may be necessary for fiscal year 2007-2008, and the same sum, or so much thereof as may be necessary for fiscal year 2008-2009, to assist the department of taxation with the costs related to assisting the executive office on aging under subsection (i) in section 1 of the Act.

The sums appropriated shall be expended by the department of taxation for the purposes of this Act.

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, 2006, and shall be repealed on January 1, 2010; provided that section 2 shall take effect on July 1, 2007.

HOUSE OF REPRESENTATIVES	H.B. NO.	355
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII