HB 701: Kupuna Caucus; DOTAX; Executive Office on Aging; Family Caregiver Tax Credit; Report; Appropriation

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 2023 report, "Valuing the Invaluable", found that 154,000 residents of the State provide unpaid caregiving services for a loved one.  The report finds that, each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000.  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 that provide unpaid long-term care services in the State.

     Accordingly, the purpose of this Act is to establish a 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      per cent of the qualified expenses of the eligible taxpayer, up to a maximum of $           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 that the eligible taxpayer:

     (1)  Provides care to a care recipient during the taxable year;

     (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; and

     (3)  May adopt rules pursuant to chapter 91 necessary to carry out this section.

     (f)  The executive office on aging shall:

     (1)  Maintain records of the total amount of qualified expenses for each taxpayer claiming a credit;

     (2)  Verify the amount of the qualified expenses claimed;

     (3)  Total all qualified expenses claimed; and

     (4)  Certify the total amount of the tax credit for each taxable year.

     Upon each determination, the executive office on aging shall issue a certificate to the taxpayer verifying the qualified expenses and the credit amount certified for each taxable year.  The taxpayer shall file the certificate with the taxpayer's tax return with the department of taxation.  Notwithstanding the executive office on aging's certification authority under this section, the director of taxation may audit and adjust certification to conform to the facts.

     (g)  If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted; provided that no credit carried forward under this subsection shall be used as a credit more than five years after the taxable year in which qualified expenses are incurred.  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.

     (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 past year.

     (i)  For the purposes of this section:

     "Activity 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 impairments of at least:

          (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 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.

     "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:

     (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, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and

     (3)  Other expenses paid or incurred by the eligible taxpayer that assists 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 to be allocated as follows:

     (1)  $100,000 for infrastructure development and implementation of the family caregiver tax credit; and

     (2)  $           for the certification of claims for tax credits under the family caregiver tax credit.

     The sum appropriated shall be expended by the executive office on aging for the purposes of this Act.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on December 31, 2050; provided that section 2 shall apply to taxable years beginning after December 31, 2026.

Report Title:

Kupuna Caucus; DOTAX; Executive Office on Aging; 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 moneys to the Executive Office on Aging.  The tax credit applies to taxable years beginning after 12/31/2026.  Effective 12/31/2050.  (SD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 2023 report, "Valuing the Invaluable", found that 154,000 residents of the State provide unpaid caregiving services for a loved one.  The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000.  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 that provide unpaid long-term care services in the State.

     Accordingly, the purpose of this Act is to establish a 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      per cent of the qualified expenses of the eligible taxpayer, up to a maximum of $           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 that the eligible taxpayer:

     (1)  Provides care to a care recipient during the taxable year;

     (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, in consultation with the executive office on aging:

     (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; provided that the executive office on aging shall certify the claim for the tax credit; and

     (3)  May adopt rules pursuant to chapter 91 necessary to carry out this section.

     (f)  If the tax credit under this section exceeds the taxpayer's net income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted; provided that no credit carried forward under this subsection shall be used as a credit more than five years after the taxable year in which qualified expenses are incurred.  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)  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 past year.

     (h)  For the purposes of this section:

     "Activity 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 impairments of at least:

          (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 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.

     "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" includes but is not limited to:

     (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, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and

     (3)  Other expenses paid or incurred by the eligible taxpayer that assists 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 to be allocated as follows:

     (1)  $100,000 for infrastructure development and implementation of the family caregiver tax credit; and

     (2)  $           for the certification of claims for tax credits under the family caregiver tax credit.

     The sum appropriated shall be expended by the executive office on aging for the purposes of this Act.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on December 31, 2050; provided that section 2 shall apply to taxable years beginning after December 31, 2026.

Report Title:

Kupuna Caucus; DOTAX; Executive Office on Aging; 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 to the Executive Office on Aging.  Applies to taxable years beginning after 12/31/2026.  Effective 12/31/2050.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 2023 report, "Valuing the Invaluable", found that 154,000 residents of the State provide unpaid caregiving services for a loved one.  The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000.  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 that provide unpaid long-term care services in the State.

     Accordingly, the purpose of this Act is to establish a 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 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      per cent of the qualified expenses of the eligible taxpayer, up to a maximum of $           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 that the eligible taxpayer:

     (1)  Provides care to a care recipient during the taxable year;

     (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, in consultation with the executive office on aging:

     (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; provided that the executive office on aging shall certify the claim for the tax credit; and

     (3)  May adopt rules pursuant to chapter 91 necessary to carry out this section.

     (f)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted; provided that no credit carried forward under this subsection shall be used as a credit more than five years after the taxable year in which qualified expenses are incurred.  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)  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 past year.

     (h)  For the purposes of this section:

     "Activity of daily living" has the same meaning as 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 impairments of at least:

          (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 that term 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 activities of daily living" has the same meaning as in section 349-16.

     "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" includes but is not limited to:

     (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, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and

     (3)  Other expenses paid or incurred by the eligible taxpayer that assists 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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the certification of claims for tax credits under the family caregiver tax credit.

     The sums appropriated shall be expended by the executive office on aging for the purposes of this Act.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000; provided that section 2 shall apply to taxable years beginning after December 31, 2025.

Report Title:

Kupuna Caucus; DOTAX; Family Caregiver Tax Credit; Report; Executive Office on Aging; Appropriation

Description:

Establishes a Family Caregiver Tax Credit for nonpaid family caregivers.  Requires the Department of Taxation to report to the Legislature.  Appropriates funds to the Executive Office on Aging to certify claims for the credit.  Effective 7/1/3000.  (HD3)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 2023 report, "Valuing the Invaluable", found that 154,000 residents of the State provide unpaid caregiving services for a loved one.  The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000.  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 that provide unpaid long-term care services in the State.

     Accordingly, the purpose of this Act is to establish a 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 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 the qualified expenses of the eligible taxpayer, up to a maximum of $5,000 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 that the eligible taxpayer:

     (1)  Provides care to a care recipient during the taxable year;

     (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, in consultation with the executive office on aging:

     (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; provided that the executive office on aging shall certify the claim for the tax credit; and

     (3)  May adopt rules pursuant to chapter 91 necessary to carry out this section.

     (f)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of the credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.  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)  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 past year.

     (h)  For the purposes of this section:

     "Activity of daily living" has the same meaning as 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 impairments of at least:

          (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 that term 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 activities of daily living" has the same meaning as in section 349-16.

     "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" includes but is not limited to:

     (1)  The improvement or alteration to the eligible taxpayer's primary residence 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, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and

     (3)  Other paid or incurred expenses by the eligible taxpayer that assists 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 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the certification of claims for tax credits under the family caregiver tax credit.

     The sums appropriated shall be expended by the executive office on aging for the purposes of this Act.

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000, and shall apply to taxable years beginning after December 31, 2025.

Report Title:

Kupuna Caucus; DOTAX; Family Caregiver Tax Credit; Report; Executive Office on Aging; Appropriation

Description:

Establishes a Family Caregiver Tax Credit for nonpaid family caregivers.  Requires the Department of Taxation to report to the Legislature.  Appropriates funds to the Executive Office on Aging to certify claims for the credit.  Effective 7/1/3000.  (HD2)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 2023 report, "Valuing the Invaluable", found that 154,000 residents of the State provide unpaid caregiving services for a loved one.  The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000.  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 that provide unpaid long-term care services in the State.

     Accordingly, the purpose of this Act is to establish a 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 refundable family caregiver tax credit against the taxpayer's individual 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 the qualified expenses of the eligible taxpayer, up to a maximum of $5,000 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 that the eligible taxpayer:

     (1)  Provides care to a care recipient during the taxable year;

     (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; and

     (3)  May adopt rules pursuant to chapter 91 necessary to carry out this section.

     (f)  If the tax credit claimed by the eligible taxpayer under this section exceeds the amount of income tax payments due from the eligible taxpayer, the excess of credit over payments due shall be refunded to the eligible taxpayer.  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)  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 past year.

     (h)  For the purposes of this section:

     "Activity 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 impairments of at least:

          (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 that term 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 activities of daily living" has the same meaning as defined in section 349-16.

     "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" includes but is not limited to:

     (1)  The improvement or alteration to the eligible taxpayer's primary residence 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, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and

     (3)  Other paid or incurred expenses by the eligible taxpayer that assists 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, a reciprocal beneficiary as defined in section 572C-3, a 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.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 3000, and shall apply to taxable years beginning after December 31, 2024.

Report Title:

Kupuna Caucus; DOTAX; Family Caregiver Tax Credit; Report

Description:

Establishes a refundable Family Caregiver Tax Credit for nonpaid family caregivers.  Requires the Department of Taxation to report to the Legislature.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

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 2023 report "Valuing the Invaluable" found that 154,000 residents of the State provide unpaid caregiving services for a loved one.  The report finds that each year, these family caregivers contribute nearly 144,000,000 hours of unpaid services, estimated at a value of $2,600,000,000.  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 that provide unpaid long-term care services in the State.

     Accordingly, the purpose of this Act is to establish a 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 refundable family caregiver tax credit against the taxpayer's individual 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 the qualified expenses of the taxpayer, up to a maximum of $5,000 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 that the eligible taxpayer:

     (1)  Provides care to a care recipient during the taxable year;

     (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; and

     (3)  May adopt rules pursuant to chapter 91 necessary to carry out this section.

     (f)  If the tax credit claimed by the eligible taxpayer under this section exceeds the amount of income tax payments due from the eligible taxpayer, the excess of credit over payments due shall be refunded to the eligible taxpayer.  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)  The department of taxation shall 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 past year.

     (h)  For the purposes of this section:

     "Activity 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 impairments of at least:

          (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 that term 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 activities of daily living" has the same meaning as defined in section 349-16.

     "Kupuna care services" has the same meaning as defined in section 349-16.

     "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" includes but is not limited to:

     (1)  The improvement or alteration to the eligible taxpayer's primary residence 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, incontinent undergarments, and portable commodes, necessary to assist a care recipient in carrying out one or more activities of daily living; and

     (3)  Other paid or incurred expenses by the eligible taxpayer that assists 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, a reciprocal beneficiary as defined in section 572C-3, a 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.  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, 2024.

Report Title:

Kupuna Caucus; DOTAX; Family Caregiver Tax Credit; Report

Description:

Establishes a refundable Family Caregiver Tax Credit for nonpaid family caregivers.  Requires the Department of Taxation to report to the Legislature before the convening of each Regular Session.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 1708

Honolulu, Hawaii

RE:    H.B. No. 701

       H.D. 3

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.B. No. 701, H.D. 3, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide assistance to nonpaid family caregivers.

     More specifically, this measure:

     (1)  Establishes a family caregiver tax credit for nonpaid family caregivers;

     (2)  Requires the Department of Taxation to submit annual reports to the Legislature; and

     (3)  Appropriates moneys to the Executive Office on Aging.

     Your Committee received written comments in support of this measure from the Disability and Communication Access Board, Executive Office on Aging, Hawaii State Council on Developmental Disabilities, Policy Advisory Board for Elder Affairs, AARP Hawaii, ALS Network, Alzheimer's Association Hawaii Chapter, Democratic Party of Hawaii, Easterseals Hawaii, Hawaii Children's Action Network Speaks!, Hawaii Primary Care Association, and nine individuals.

     Your Committee received written comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committee finds that family caregivers are the backbone of the long-term care system in the State.  Your Committee also finds that 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 loved ones are not prematurely institutionalized and can remain in their homes.  Your Committee recognizes that nonpaid family caregivers face many physical, emotional, and financial challenges and often balance caregiving with work and other personal responsibilities.

     Your Committee has amended this measure by:

     (1)  Clarifying the Executive Office on Aging's certification responsibilities with regard to the tax credit; and

     (2)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 701, H.D. 3, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 701, H.D. 3, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 1201

Honolulu, Hawaii

RE:    H.B. No. 701

       H.D. 3

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was referred H.B. No. 701, H.D. 3, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Establish a Family Caregiver Tax Credit for nonpaid family caregivers;

     (2)  Require the Department of Taxation to report to the Legislature; and

     (3)  Appropriate funds to the Executive Office on Aging to certify claims for the credit.

     Your Committee received testimony in support of this measure from the Disability and Communication Access Board, Executive Office on Aging, Policy Advisory Board for Elder Affairs, AARP Hawaiʻi, Hawaii Primary Care Association, Hawaiʻi Children's Action Network Speaks!, Alzheimer's Association-Hawaii Chapter, Democratic Party of Hawaiʻi, Easterseals Hawaii, and fourteen individuals.

     Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committee finds that family caregivers are the backbone of the long-term care system in the State with approximately 154,000 residents in the State providing unpaid caregiving services for a loved one.  Your Committee further finds that nonpaid family caregivers face many physical, emotional, and financial challenges and often balance caregiving with work and other personal responsibilities.  Your Committee 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 that provide unpaid long-term care services in the State.  This measure provides financial relief through the establishment of a Family Caregiver Tax Credit for nonpaid family caregivers to acknowledge their contributions and helps sustain their ability to provide care.

     Your Committee notes the testimony of the Department of Taxation that this measure's proposed Family Caregiver Tax Credit would have an annual fiscal impact of $397.4 million in lost revenue to the State's general fund, calculated based on a maximum nonrefundable Family Caregiver Tax Credit of $5,000 in any taxable year and a reimbursement rate of one hundred percent of the qualified expenses of the eligible taxpayer.

     Your Committee has amended this measure by:

     (1)  Deleting language that would have appropriated an unspecified amount of funds to the Executive Office on Aging for fiscal year 2025-2026 for the certification of claims for tax credits under the Family Caregiver Tax Credit;

     (2)  Inserting language appropriating an unspecified amount of funds to the Executive Office on Aging for fiscal year 2026-2027 to be allocated as follows:

          (A)  $100,000 for infrastructure development and implementation of the Family Caregiver Tax Credit; and

          (B)  An unspecified amount for the certification of claims for tax credits under the Family Caregiver Tax Credit;

     (3)  Inserting an effective date of December 31, 2050, to encourage further discussion;

     (4)  Making the Family Caregiver Tax Credit apply to taxable years beginning after December 31, 2026, rather than December 31, 2025; and

     (5)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Health and Human Services that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 701, H.D. 3, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 701, H.D. 3, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Health and Human Services,

STAND. COM. REP. NO.  1020

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 701

      H.D. 3

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Finance, to which was referred H.B. No. 701, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to establish a tax credit for nonpaid family caregivers.

     Your Committee received testimony in support of this measure from the Disability and Communication Access Board; Policy Advisory Board for Elder Affairs; AARP Hawaiʻi; The Institute for Human Services, Inc.; Hawaiʻi Children's Action Network Speaks!; Alzheimer's Association; and seven individuals.  Your Committee received comments on this measure from Department of Taxation; Executive Office on Aging; and Tax Foundation of Hawaii.

     Your Committee has amended this measure by:

     (1)  Making the amount of the tax credit equal to a percentage of a taxpayer's qualified expenses;

     (2)  Changing the tax credit cap per taxpayer to an unspecified amount;

     (3)  Specifying a sunset date of five years for any excess nonrefundable credits to be carried forward as a credit against tax liability; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 701, H.D. 2, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 701, H.D. 3.

Respectfully submitted on behalf of the members of the Committee on Finance,

STAND. COM. REP. NO.  333

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 701

      H.D. 2

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Economic Development & Technology, to which was referred H.B. No. 701, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to establish a refundable Family Caregiver Tax Credit for nonpaid family caregivers.

     Your Committee received testimony in support of this measure from the Disability and Communication Access Board; AARP Hawaiʻi; Alzheimer's Association, Hawaii Chapter; Hawaiʻi Family Caregiver Coalition; Hawaii Self-Advocacy Advisory Council; Hawaii Primary Care Association; Hawaiʻi Children's Action Network Speaks!; Aloha United Way and the ALICE Initiative; and numerous individuals.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committee finds that a 2023 report from the AARP found that 154,000 Hawaii residents provide unpaid caregiving services for a loved one.  Your Committee further finds that unpaid family caregivers face many physical, emotional, and financial challenges and often balance caregiving with work and other responsibilities.  This measure helps provide support to these caregivers by establishing a Family Caregiver Tax Credit for nonpaid family caregivers.

     Your Committee has amended this measure by:

     (1)  Making the Family Caregiver Tax Credit non-refundable;

     (2)  Requiring the Director of Taxation to prepare forms, ascertain the validity of claims, and adopt rules in consultation with the Executive Office on Aging;

     (3)  Requiring the Executive Office on Aging to certify claims for tax credits;

     (4)  Adding an appropriation of an unspecified sum for the Executive Office on Aging to certify claims for tax credits;

     (5)  Changing the taxable years for which the Family Caregiver Tax Credit applies to taxable years beginning after December 31, 2025;

     (6)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (7)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider an appropriation amount of $750,000 for the Executive Office on Aging to certify claims for tax credits.

     As affirmed by the record of votes of the members of your Committee on Economic Development & Technology that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 701, H.D. 1, as amended herein, and recommends that it be referred to your Committee on Finance in the form attached hereto as H.B. No. 701, H.D. 2.

Respectfully submitted on behalf of the members of the Committee on Economic Development & Technology,

STAND. COM. REP. NO.  4

Honolulu, Hawaii

                , 2025

RE:   H.B. No. 701

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Madame:

     Your Committee on Human Services & Homelessness, to which was referred H.B. No. 701 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to establish a refundable tax credit for nonpaid family caregivers.

     Your Committee received testimony in support of this measure from the Executive Office on Aging; AARP Hawai‘i; Hawai‘i Family Caregiver Coalition; Democratic Party of Hawai‘i; Alzheimer's Association - Hawaii; and numerous individuals.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committee finds that unpaid family caregivers face significant physical, emotional, and financial challenges, often juggling caregiving duties alongside work and other personal responsibilities.  Additionally, your Committee notes that family caregivers, on average, allocate twenty-six percent of their income to caregiving expenses, with over three-quarters covering out-of-pocket costs for items such as equipment, transportation, and home modifications.  Therefore, this measure aims to alleviate the financial burden that unpaid family caregivers bear while supporting their loved ones in the State.

     Your Committee notes the concerns raised in testimony by the Department of Taxation, regarding whether the Department has the appropriate personnel to determine tax credit eligibility.  The Department of Taxation also noted that making the tax credit nonrefundable, rather than refundable as currently proposed by this measure, is preferable, as refundable credits are more susceptible to waste and could allow persons without a connection to the State to claim the credit and obtain a refund.  The Department also noted that this measure makes the tax credit equal to the full amount of a taxpayer's expenses, whereas making the amount of the credit equal to a percentage of the taxpayer's expenses would discourage waste.  Your Committee also notes the concerns raised in testimony about whether the tax credit is duplicative of an existing tax credit.  Your Committee believes these concerns merit further discussion by your Committee on Economic Development & Technology.

     Your Committee has amended this measure by:

     (1)  Deleting the definition for "kupuna care services", as this term is not used in this measure;

     (2)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (3)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Human Services & Homelessness that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 701, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 701, H.D. 1, and be referred to your Committee on Economic Development & Technology.

Respectfully submitted on behalf of the members of the Committee on Human Services & Homelessness,