SB 436 — "Age with Dignity Act" (Caregiver Tax Credit) — Summary
Status and key dates
- Bill number: SB 436 (Age with Dignity Act)
- Introduced: February 18, 2025
- Current status (as provided): Passed first reading.
- Effective date in bill: Applies to taxable years beginning on or after January 1, 2025.
Purpose / intent
- Establish a state individual income tax credit to help taxpayers who provide care for adult dependents (qualifying relatives). The credit is intended to reduce the financial burden on family caregivers and to incentivize caring for adults at home (including veterans), thereby supporting aging-in-place and caregiving at the household level.
What the bill would do — key provisions
- New tax code section (proposed): allows a credit for “adult dependents” (taxpayers who claim a federal exemption for a qualifying relative under Internal Revenue Code §152).
- Credit amounts (per qualifying relative):
- $15,000 credit if the qualifying relative is a veteran of the U.S. Armed Forces.
- $12,000 credit for any other qualifying relative.
- Adjusted Gross Income (AGI) eligibility limits (taxpayer must have AGI below the threshold):
- Married filing jointly / surviving spouse: $150,000
- Head of household: $112,500
- Single: $75,000
- Married filing separately: $75,000
- Nonresidents and part‑year residents: the credit must be reduced (prorated) using the same fraction applied under the state's existing law (G.S. 105‑153.4) to reflect in‑state income.
- Credit limitation: the credit may not exceed the taxpayer’s state income tax liability for the taxable year after accounting for other allowable credits (i.e., the credit is nonrefundable to the extent it would exceed tax liability, per the bill language).
- Applicability: credit claimed for each qualifying relative for whom the taxpayer is allowed the federal exemption.
Who is affected
- Primary beneficiaries: North Carolina resident taxpayers who (a) claim a federal exemption for an adult qualifying relative under IRC §152, (b) meet the AGI thresholds, and (c) have sufficient state tax liability to use the (nonrefundable) credit. Veterans who are qualifying relatives are prioritized with a larger credit amount.
- State fiscal impact: the bill would reduce individual income tax revenues to the extent the credit is claimed. (No revenue estimate is included in the bill text provided; fiscal impact would depend on number of eligible taxpayers and utilization.)
Practical effects and considerations
- The credit is sizeable on a per‑dependent basis ($12k–$15k), likely to substantially lower tax owed for eligible caregivers with sufficient tax liability, or otherwise provide targeted relief up to the taxpayer’s tax liability limit.
- Because the credit is not explicitly refundable, lower‑income caregivers with little or no state tax liability may receive limited or no direct benefit unless the credit language is later amended to allow refunds or carryforwards.
- Ties eligibility to the federal qualifying relative rules (IRC §152), so federal definitions and rules will determine who counts as a qualifying dependent.
- The enhanced amount for veterans may encourage informal family care for aging veterans and recognizes veteran caregiving needs.
Procedural next steps (typical)
- After first reading, the bill would normally proceed through committee review(s), potential amendments, and additional readings in the chamber. If passed by the Senate, it would then go to the House for consideration and, if approved, to the Governor for signature or veto.
Sponsors
- Primary sponsors listed in the bill text: Senators Grafstein and Everitt (per the bill header). (Note: multiple documents with the SB 436 number in different states exist; this summary focuses on the Age with Dignity Act caregiver credit language provided.)
If you’d like, I can:
- Draft a short fiscal impact checklist (what revenue data and uptake assumptions are needed to estimate cost), or
- Produce an FAQ for taxpayers and tax preparers explaining eligibility and how to claim the credit.
