WeVote
Log In

Bill

Bill

HB 25-1045

Modify Long-Term Care Insurance Income Tax Credit

2025 Regular Session Introduced by Lisa Frizell and 4 co-sponsors

HB 25-1045 aimed to double long-term care insurance tax credits and raise income thresholds, making coverage more accessible for higher-income taxpayers, but was postponed indefinitely.

House Committee on Finance Postpone Indefinitely
0
WeVote Research Nonpartisan
Bill Summary · HB 25-1045

Summary of HB 25-1045: Modify Long-Term Care Insurance Income Tax Credit

Bill Overview

Bill Number: HB 25-1045
Introduced: January 8, 2025
Status: Postponed Indefinitely by the House Committee on Finance on January 27, 2025
Prime Sponsors: Rep. Joseph, Sen. Liston

The purpose of HB 25-1045 was to modify the state income tax credit for purchasing long-term care insurance, aimed at increasing accessibility and affordability for taxpayers beginning in tax year 2025.

Key Provisions

The bill proposed the following significant changes to the existing long-term care insurance tax credit:

  1. Increased Federal Taxable Income (FTI) Thresholds:

    • For single taxpayers claiming one insurance policy, the FTI threshold would increase from $50,000 to $100,000.
    • For joint filers claiming one policy, the threshold would also rise to $100,000.
    • For joint filers claiming two policies, the threshold would increase from $100,000 to $200,000.

  2. Increased Maximum Credit Amount:

    • The maximum credit per taxpayer per year would double from $150 to $300 for each policy claimed.
    • Starting in tax year 2026, this amount would be adjusted annually for inflation.

  3. Credit Calculation:

    • The tax credit would remain at 25% of the total amount paid for long-term care insurance, but with the increased thresholds and maximum credit, more taxpayers would qualify for a higher credit.

Fiscal Impact

The fiscal note associated with the bill projected the following impacts:

  • State Revenue:

    • Estimated decrease in state income tax revenue of $1.2 million in FY 2024-25 (half-year impact), $2.4 million in FY 2025-26, and increasing amounts in subsequent years.

  • State Expenditures:

    • An appropriation of $21,761 was required for FY 2025-26 to implement the changes, primarily for programming and testing the Department of Revenue's GenTax software.

  • TABOR Refunds:

    • The bill was expected to decrease the amount of state revenue required for TABOR refunds, as reduced revenue would lower the refund obligation.

Affected Parties

The modifications proposed in HB 25-1045 would primarily affect:
- Taxpayers purchasing long-term care insurance, particularly those with higher incomes who previously did not qualify for the credit.
- The Department of Revenue, which would incur costs related to implementing the changes in tax credit processing.

Effective Date

If enacted, the bill would take effect 90 days following adjournment of the General Assembly, assuming no referendum petition is filed.

Conclusion

While HB 25-1045 aimed to enhance the long-term care insurance tax credit to support more taxpayers, it was ultimately postponed indefinitely by the House Committee on Finance, meaning the proposed changes will not take effect.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.