Raised Bill No. 7007 proposes significant amendments to the tax code aimed at providing financial relief to caregivers of elderly persons, children, and disabled individuals. The bill seeks to repeal subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and replace it with new provisions that allow caregivers to deduct specific types of income from their gross income for state tax purposes, including federally exempt income, state tax refunds, and certain retirement benefits. Additionally, the bill introduces deductions for caregiving expenses, such as home health care services, with limits set at $3,000 and $60,000 depending on the care provided. These changes are set to take effect for taxable years commencing on or after January 1, 2025.

Furthermore, the bill outlines a phased approach to the taxation of individual retirement account (IRA) distributions, allowing for a 50% deduction starting in 2024, increasing to 75% in 2025, and reaching 100% in 2026 and thereafter. It also modifies existing tax provisions by deleting previous language regarding contributions to ABLE accounts and inserting new provisions for deductions related to caregiving expenses. The bill aims to alleviate the financial burden on caregivers while ensuring compliance with federal tax regulations, ultimately promoting better support for families caring for vulnerable populations.

Statutes affected:
Raised Bill: 12-701
AGE Joint Favorable Change of Reference: 12-701