Supporting Family Caregivers in Nebraska

Caring for a parent, spouse, or other loved one can be a 24/7 job that is emotionally, physically, and financially difficult. That’s why AARP works tirelessly to support family caregivers—striving to make your big responsibilities a little bit easier.

Support is finally on the way for Nebraska’s 179,000 family caregivers and the parents, spouses, and other loved ones they care for with a tax credit provided by the Caregiver Tax Credit Act.

The Caregiver Tax Credit Act passed during the 2024 Nebraska legislative session and will take effect on January 1, 2025. The tax credit will be available for the 2025 tax year. Nebraska is the second state in the nation to adopt an expansive tax credit for family caregivers.

About the Tax Credit:
The Caregiver Tax Credit Act provides a nonrefundable tax credit for out-of-pocket costs incurred by the unpaid family caregiver for a limited set of services. The expenses must be directly related to assisting the family caregiver in providing care to an eligible family member. The tax credit is capped at $2,000 per year for most participants. Individuals caring for veterans or those with a dementia-related diagnosis will receive up to a $3,000 tax credit. There are no age restrictions to qualify for the tax credit.

Qualifications to Receive the Tax Credit:

• Eligible Nebraskans receiving care from a family caregiver must require assistance with at least two activities of daily living (ADLs), as outlined in the qualifications section. The ADLs must be certified by a licensed health care provider.
• Family caregivers—or those providing care and support for an eligible family member—must have a federally adjusted gross income of less than $50,000 (individual) or less than $100,000 if a married couple filing jointly to receive the tax credit. They must also personally incur uncompensated expenses directly related to the care of an eligible family member.
• Individuals must qualify as a dependent, spouse, parent, or other relation by blood or marriage to the family caregiver.
• Individuals must live in a private residential home—not an assisted living center, nursing facility, or residential care home.
  

Answers to Frequently Asked Questions:

• What qualifies as an eligible out-of-pocket expense?
  Hiring a home care aide, respite care, adult day care, personal care attendants, and health care equipment/technology are types of eligible expenditures paid or incurred by the family caregiver providing care to an eligible family member.

• What are the approved activities of daily living (ADLs)?
  Includes the individual’s ability to:
  • Move from one position to another and walk independently
  • Feed oneself
  • Select appropriate clothes and to put the clothes on without aid
  • Bathe, groom oneself, and maintain dental hygiene and nail/hair care
  • Control bladder and bowel function, and the ability to get to and from the toilet without aid, using it appropriately, and cleaning oneself

• How does a family caregiver claim the tax credit?
  The eligible family caregiver will apply for the tax credit by submitting an application and all required documents to the Nebraska Department of Revenue. It is advisable to save all receipts for expenses incurred.
  
  Two or more family caregivers may claim the tax credit for the same eligible family member. However, the maximum allowable credit shall be allocated equally between each family caregiver.

• Is there a limit to the annual allocation of state funds available for the tax credit?
  Yes. The Nebraska Legislature capped the amount of the annual tax credit expenditure at $1.5 million for the first two years and the amount expands to $2.5 million thereafter. The credit will be available to eligible family caregivers on a first-come basis until the funds are depleted.

• What expenses are covered or not covered?
  Covered:
  • Durable medical equipment (wheelchairs, walkers, lift chairs, and adult diapers)
  • Improvements to the family caregiver’s or eligible family member’s primary residence if it allows the eligible family member to live in the residence and remain mobile, safe, and independent
  
  Not Covered:
  • Diabetic medications (insulin) or medical devices/supplies (pumps, glucose monitors, etc.
  • Expenditures of general household maintenance activities such as painting, plumbing, electrical repairs, and exterior maintenance
  • Individuals living in a nursing or assisted living facility
  • Prescription drugs or over-the-counter drugs (Note, many individuals being cared for are Medicare recipients and will already have at least a portion of their medications covered.)

AARP Family Caregiving Site
AARP is here to help with information and resources on caregiver life balance, financial and legal issues, care at home, health and more.

AARP Fighting for Your Blog
Read more about Nebraska Governor Jim Pillen signing the Caregiver Tax Credit Act into law.

AARP Trifold Brochure on Nebraska's Caregiver Tax Credit
Download our Nebraska's Caregiver Tax Credit trifold brochure for helpful information and answers to frequently asked questions.

Community Resource Finder
Easily access a comprehensive listing of dementia and aging-related resources such as care providers, programs, and services available in a specified area.

Quick Tips for Caregivers
Check out how to use simple household items to solve everyday challenges.

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