Across the country, states consider tax credits for family caregivers

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Institute on Aging and its partner organizations are dedicated to helping family caregivers however they can, yet for many families, more help is needed.

In a recent piece by Kaiser Health News published in the New York Times, a Bay Area couple, Gloria and Arthur Brown of San Mateo, shared their story. To anyone caring for a family member, it’s a familiar one.

Arthur, 79, is living with Alzheimer’s disease. Gloria, 73, is his primary caregiver. A home health aide comes to their home twice a week, but those visits are only brief respites for her. And the cost of care borders on untenable.

Paying for help isn’t cheap: The going rate in the San Francisco Bay Area, where the Browns live, ranges from $25 to $35 an hour. Ms. Brown estimates she has spent roughly $72,000 on caregivers, medications and supplies since her husband was given his diagnosis four years ago.

Thankfully, it looks like help may be on its way for the Browns and millions of others in California and across the country. The California legislature is currently considering a bill authored by Assemblyman Jim Patterson that would give family caregivers in the state a tax credit of up to $5,000 annually to offset expenses. Other states around the country are considering similar measures, as well, including Arizona, Illinois, Nebraska, New Jersey, New York, Rhode Island, and Wisconsin.

It’s already possible for family caregivers to get paid for their work, but the options are limited. There are existing tax deductions available, as well. Patterson’s proposed tax credit will provide additional help, but according to the AARP, it won’t cover the out-of-pocket costs of caregiving entirely. A 2016 study by the organization found that, on average, family caregivers spend $6,954 annually out of their own pockets. The AARP also estimates there are about 40 million people caring for family members nationwide.

The need for caregivers is growing fast

With 10,000 Baby Boomers turning 65 every day, it’s no secret the need for professional caregivers is growing ever more urgent. California Governor Gavin Newsom went so far as to feature it in his State of the State Address in February, calling for a “Master Plan for Aging.”

“The Golden State is getting grayer,” he said. “We need to get ready for the major demographic challenge headed our way.

“For the first time in our history, older Californians will outnumber young children. Over the next decade, our statewide senior population will increase by 4 million. In 25 years, it will double. And more than half will require some form of long-term care.”

Newsom pointed to his experience with his own father, who was diagnosed with dementia and passed away last year.

“I lost my father over the holidays, after years of declining physical health and dementia,” Newsom said. “He was determined to live out his days with dignity. He also happened to be a retired public official with a pension and a support circle of family and friends.”

Not all Californians have the means to deal with a dementia diagnosis, Newsom said, and even his family struggled. “Even with all those advantages, it was a daily challenge to meet his needs so he could live in place and maintain a good quality of life,” Newsom said. “Millions of Californians share a similar story, and the numbers will only grow.”

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Institute on Aging

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