Senate File 382 - Introduced SENATE FILE 382 BY MATHIS A BILL FOR An Act providing an individual income tax credit related to 1 the care of individuals with Alzheimer’s disease or other 2 dementia-related illnesses and including applicability 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2333SS (2) 87 mm/rj

S.F. 382 Section 1. Section 422.12, subsection 1, Code 2017, is 1 amended by adding the following new paragraphs: 2 NEW PARAGRAPH . 0a. “Activities of daily living” means the 3 same as defined in section 7702B(c)(2)(B) of the Internal 4 Revenue Code. 5 NEW PARAGRAPH . 00a. “Applicable individual ” means an 6 individual who has been diagnosed by a physician as having 7 Alzheimer’s disease or another dementia-related illness and who 8 has been certified by a physician as being unable to perform 9 for at least one hundred eighty consecutive days at least one 10 activity of daily living without substantial assistance from 11 another individual due to a loss of functional capacity. 12 NEW PARAGRAPH . 0c. “Physician” means an individual 13 authorized to practice medicine and surgery or osteopathic 14 medicine and surgery under the laws of any state. 15 Sec. 2. Section 422.12, subsection 2, Code 2017, is amended 16 by adding the following new paragraph: 17 NEW PARAGRAPH . e. (1) A caregiver tax credit in an amount 18 equal to the product of five hundred dollars multiplied by 19 the number of applicable individuals with respect to whom the 20 taxpayer is an eligible caregiver for the tax year. 21 (2) (a) An applicable individual shall have only one 22 eligible caregiver for purposes of the credit. 23 (b) A taxpayer shall be treated as an eligible caregiver 24 for any tax year with respect to the taxpayer’s spouse or a 25 dependent who is an applicable individual. 26 (c) (i) If more than one individual could be considered 27 an eligible caregiver with respect to the same applicable 28 individual for a tax year, the applicable individual shall be 29 treated as the eligible caregiver for purposes of receiving 30 the credit if each of the individuals who could be considered 31 an eligible caregiver files a written declaration that the 32 individual will not claim the applicable individual for the 33 credit. The written declaration shall be made in the manner 34 and form prescribed by rule by the department. 35 -1- LSB 2333SS (2) 87 mm/rj 1/ 3

S.F. 382 (ii) If each individual who could be considered an eligible 1 caregiver does not file a written declaration as described in 2 subparagraph subdivision (i), the individual with the highest 3 net income for the tax year shall be treated as the eligible 4 caregiver. 5 (d) If no other individual is an eligible caregiver 6 with respect to an applicable individual for a tax year, 7 the applicable individual shall be treated as the eligible 8 caregiver for purposes of receiving the credit. 9 (3) A credit shall not be allowed under this paragraph “e” 10 for any eligible caregiver whose net income for the tax year is 11 equal to or exceeds one hundred thousand dollars in the case of 12 married persons filing jointly, or fifty thousand dollars in 13 the case of all other persons. 14 Sec. 3. APPLICABILITY. This Act applies to tax years 15 beginning on or after January 1, 2018. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill provides a nonrefundable caregiver tax credit 20 against the individual income tax equal to $500 for each 21 applicable individual for whom a taxpayer is treated as 22 being an eligible caregiver for the tax year. “Applicable 23 individual” is defined to mean an individual who has been 24 diagnosed by a physician as having Alzheimer’s disease or 25 another dementia-related illness and who has been certified 26 by a physician as being unable to perform for at least 180 27 consecutive days at least one activity of daily living without 28 substantial assistance from another individual due to loss of 29 functional capacity. “Activities of daily living” include 30 eating, toileting, transferring, bathing, dressing, and 31 continence. 32 An applicable individual shall only have one eligible 33 caregiver for purposes of the credit. A taxpayer is considered 34 an eligible caregiver for an applicable individual if that 35 -2- LSB 2333SS (2) 87 mm/rj 2/ 3

S.F. 382 applicable individual is the taxpayer’s spouse or dependent. 1 If more than one individual could be considered an eligible 2 caregiver for an applicable individual, the person with 3 the highest net income for the tax year shall be treated as 4 the eligible caregiver unless each person files a written 5 declaration that the person will not claim the applicable 6 individual for the credit. If that occurs, the applicable 7 individual shall be considered the eligible caregiver and may 8 claim the tax credit. Also, if no other individual qualifies 9 as an eligible caregiver for an applicable individual for a 10 tax year, the applicable individual shall be treated as the 11 eligible caregiver. 12 The credit is unavailable for any eligible caregiver whose 13 net income is $100,000 or more for the tax year in the case of 14 married persons filing jointly, or $50,000 or more in the case 15 of all other persons. 16 The bill applies to tax years beginning on or after January 17 1, 2018. 18 -3- LSB 2333SS (2) 87 mm/rj 3/ 3