The proposed legislation, General Assembly Raised Bill No. 285, aims to establish a Family Caregiver Tax Credit effective January 1, 2027, applicable to taxable years starting on or after that date. The bill defines key terms such as "activities of daily living," "eligible expenditure," "eligible family member," and "family caregiver." It specifies that eligible expenditures include improvements to a caregiver's or family member's residence, necessary equipment purchases, and other related expenses, while excluding general household maintenance costs. To qualify for the tax credit, family caregivers must have a federal adjusted gross income below $50,000 for individuals or $100,000 for couples filing jointly and must have incurred uncompensated expenses for the care of an eligible family member who requires assistance with at least two daily living activities.

The bill allows a tax credit of 50% of eligible expenditures, capped at $2,000 per taxable year, and stipulates that if multiple caregivers claim the credit for the same family member, the credit will be divided equally among them. The Department of Revenue Services will manage a system of tax credit vouchers, with applications processed on a first-come, first-served basis, and a total cap of $1.8 million in tax credit vouchers issued per year. Additionally, the credit is nonrefundable, meaning it can only reduce tax liability and cannot result in a refund.