HB 1972

HOUSE OF REPRESENTATIVES
H.B. NO.
1972
THIRTY-THIRD LEGISLATURE, 2026
H.D. 2
STATE OF HAWAII
S.D. 1
A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.� The legislature finds that family caregivers
are the backbone of the long-term care system in the State.� AARP's latest report, "Caregiving in the
U.S. 2025: �Caring Across States",
found that about two hundred sixty thousand Hawaii residents are family
caregivers, providing largely unpaid and unsupported care to older parents,
spouses, and other loved ones.
���� Family
caregivers provide more than $2,600,000,000 in unpaid care each year in Hawaii,
helping adult family members live independently at home and in their
communities.� 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 who
provide unpaid long-term care services in the State.
���� Accordingly,
the purpose of this Act is to establish a nonrefundable 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 family caregiver tax credit against the
taxpayer's individual net 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 seventy-five per cent of the qualified expenses of the
eligible taxpayer, up to a maximum of $3,000 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 in which the eligible
taxpayer:
���� (1)� Provides care to a care recipient;
���� (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, including a letter from a licensed health care
provider confirming that the care recipient meets the criteria of the
definition of that term in subsection (i); and
���� (3)� Shall adopt rules pursuant to
chapter 91 necessary to carry out this section.
���� (f)� The credit authorized by this
section shall not be used to reduce the tax liability of the taxpayer to less
than $0.� If the tax credit under this
section exceeds the taxpayer's net income tax liability, the excess of the
credit over liability shall not be carried over to subsequent years.� 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)� A taxpayer shall not claim
qualified expenses under this section that are claimed as expenses for
household and dependent care services necessary for gainful employment under
section 235-55.6.
���� (h)� The department of taxation
shall submit a 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 preceding taxable year.
���� (i)� For the purposes of this
section:
���� "Activities 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 an impairment in at least one of
the following:
��������� (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 disability 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 activity of daily living" has the same meaning as
defined in section 349-16.
���� "Licensed health care provider" means a physician or an
osteopathic physician licensed under chapter 453, a physician assistant
licensed under chapter 453, or an advanced practice registered nurse licensed
under chapter 457.
���� "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" include but
are not limited to expenses for:
���� (1)� The improvement of or alteration to
the eligible taxpayer's primary residence in order 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 and
portable commodes, necessary to assist a care recipient in carrying out one or
more activities of daily living; 
���� (3)� Professional home care services
provided by a home care agency licensed under section 321-14.8; and
���� (4)� Other expenses paid or incurred by
the eligible taxpayer that assist 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, reciprocal beneficiary as defined in section 572C-3, 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.� 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 2026-2027 for infrastructure
development and implementation of the family caregiver tax credit.
���� The
sum appropriated shall be expended by the department of taxation for the
purposes of this Act.
���� SECTION
4.� New statutory material is
underscored.
���� SECTION
5.� This Act shall take effect on January
1, 2050; provided that:
���� (1)� Section 2 shall apply to taxable years
beginning after December 31, 2026; and
���� (2)� Section 3 shall take effect on July 1,
2026.
Report Title:
Kupuna
Caucus; DOTAX; Family Caregiver Tax Credit; Report; Appropriation
Description:
Establishes
a family caregiver tax credit for nonpaid family caregivers.� Requires the Department of Taxation to submit
annual reports to the Legislature.�
Appropriates funds. �Applies to
taxable years beginning after 12/31/2026.�
Effective 1/1/2050.� (SD1)
The summary description
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not legislation or evidence of legislative intent.