SB2047 SD3

SECTION 1. The legislature finds that as the number of elderly individuals in the State increases, it is important to allow these individuals to age-in-place with the help of family caregivers. Enabling these elderly individuals to remain in their own, or their families', homes will allow them to live happier and healthier lives and allow the State to benefit from the value of the services provided by family caregivers through the deferral of paid caregiving and institutionalization.

Unfortunately, many homes are not readily equipped with the safety and accessibility measures necessary to facilitate caring for elderly or disabled individuals. Many elderly or disabled individuals require modifications for increased accessibility when entering and exiting their home and to maneuver within their home. Safety features are also necessary for using the facilities in a bathroom, such as the sink, toilet, tub, or shower. Increased support and services must be provided to family caregivers to facilitate family caregiving and aging-in-place efforts. Although these types of modifications to a home can be very costly, it is more costly to move an elderly individual into an outside care facility, if such a facility is even available.

The purpose of this part is to provide a refundable tax credit for taxpayers who make modifications to their homes to accommodate individuals with disabilities or facilitate aging‑in‑place. In addition, this Act is aimed at providing tax incentives to taxpayers who include assistive devices in their home modifications to benefit a person with a disability or to facilitate aging-in-place.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235‑ Home accessibility features for the disabled tax credit. (a) Each individual taxpayer who files an individual income tax return for a taxable year, and 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, may claim a home accessibility features for the disabled tax credit against the taxpayer's net individual income tax liability for the taxable year for which the individual's income tax return is being filed; provided that:

(1) An individual who has no income or no income taxable under this chapter and who is not claimed or is not otherwise eligible to be claimed as a dependent by a taxpayer for federal or Hawaii state individual income tax purposes may claim this tax credit;

(2) A husband and wife filing separate returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed; and

(3) No tax credit may be claimed for amounts less than $1.

(b) The tax credit for each taxpayer under this section shall be equal to a fixed percentage of the qualified costs incurred by the taxpayer to renovate a residence to provide handicapped accessibility or aging-in-place improvements that are based upon the following schedule; provided that the maximum allowable credit for each of the following taxpayers shall be:

(1) $5,000 for a taxpayer filing as single or married filing separately;

(2) $7,500 for a taxpayer filing as head of household or as a surviving spouse; or

(3) $10,000 for taxpayers filing a joint return.

TAX CREDIT SCHEDULE

Adjusted Gross Income Percentage of Qualified Costs

Under $30,000 50%

$30,000 to under $50,000 35%

$50,000 to under $75,000 20%

$75,000 and over 5%

(1) All qualified costs must be incurred in Hawaii and be subject to chapter 237;

(2) The residence for which qualified costs are incurred must be located in Hawaii; and

(3) At least one elderly person or person with a disability must physically reside in the renovated residence for which a credit is claimed under this section.

(d) The basis of the renovated residence for which a credit is claimed under this section shall be reduced by an amount equal to the credit allowable and claimed. In the alternative, the taxpayer shall treat the amount of the credit allowable and claimed as a taxable income item for the taxable year in which the residence is disposed.

(e) The credit allowed under this section shall be claimed against the net income tax, if any, imposed by this chapter for the taxable year in which the credit is properly claimed. If the tax credit under this section exceeds the taxpayer's net income tax liability, any excess of the tax credit shall be refunded to the taxpayer; provided that no refund or payment on account of the tax credit allowed by this section shall be made for any amounts less than $1.

(f) If a taxpayer claims the cost of accessibility features as a tax deduction or for claiming another tax credit under this chapter or as a tax credit, then no tax credit shall be claimed under this section.

(g) As used in this section:

"Accessibility features" means:

(1) A no-step entrance allowing access into the residence;

(2) Lifts or lift mechanisms that assist a person with vertical movement for entry into or access within a residence;

(3) Expanding the width of doorways, hallways, or entryways to provide at least a thirty‑two inch clearance for purposes of entry into or access within a residence;

(4) Reinforcements in bathroom walls and installation of grab bars around the toilet, tub, and shower;

(5) Light switches and outlets placed in wheelchair-accessible locations; and

(6) Other universal design features or accessibility or adaptability features prescribed in building codes of any county that are approved by the director of taxation.

"Aging-in-place" means renovations made to a residence to accommodate necessary life activities of an elderly person, including mobility, accessibility, safety, and hygienic modifications.

"Disability" means a physical or mental impairment that substantially limits one or more of an individual's major life activities.

"Elderly person" means an individual who has attained the age of sixty-five before the close of the taxable year in which a tax credit is claimed under this section.

"Qualified costs" means the following direct costs incurred by the taxpayer to renovate a residence to provide handicapped accessibility or aging in place:

(1) Plans, designs, construction, alteration, or modification of a residence determined to be necessary improvements for medical purposes by a medical doctor licensed to practice in the State. The director of taxation may require verification by a person's medical doctor in order to ascertain the validity of any such costs;

(2) Ramps for gaining entry into or access within a residence;

(3) Lifts or lift mechanisms that assist a person with vertical movement for gaining entry into or access within a residence;

(4) Expanding the width of doorways, hallways, or entryways for purposes of gaining entry into or access within a residence;

(5) Grab bars or other devices used to stabilize a person within a residence in areas including, but not limited to, bathrooms, hallways, and sitting areas; and

(6) Any other costs approved by the director of taxation.

"Residence" means the taxpayer's "principal residence" within the meaning of section 121 (with respect to exclusion of gain from sale of principal residence) of the Internal Revenue Code.

(h) The director of taxation may adopt rules under chapter 91 and prepare any forms necessary to carry out this section."

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, 2050.

THE SENATE	S.B. NO.	2047
TWENTY-FOURTH LEGISLATURE, 2008		S.D. 3
STATE OF HAWAII