Upset about lost medical deductions? Time to take action!

By Charmaine Fuller Cooper

Changes to state tax laws that took effect last year have left seniors holding the bag. Most older adults didn’t fully realize the impact until filing their 2014 taxes this spring.  Here's what was lost:

• Up to $2,000 in deductions for private retirement income
• Deductions for medical expenses (previously able to deduct expenses that exceed 10% of Adjusted Gross Income if under 65 and 7.5% if over 65)

 

While lawmakers may have thought a higher standard deduction would protect seniors and families, legislative actions had different results and legislators now have an opportunity to address, correct and restore these deductions.

Moe Smith, an AARP member from Mecklenberg County is one of many older adults who contacted their legislators about the impact of the new state tax package. The loss of medical deductions cost him an additional $5,200 while still trying to cover the $66,ooo in annual medical expenses his wife who suffers from Alzheimers requires. Here is the response he received from his State Representative.

“As one of the primary sponsors of the tax reduction legislation in 2013 I did not anticipate the full impact of removing the medical deduction.  I, and others, am working on a resolution to this issue.  I appreciate your e-mails and the detailed information you have sent me.”

But, now we are hearing the opposite. We have been informed that the State House Finance Committee Chairs are refusing to hear a bill that would restore even a portion of medical deductions to North Carolina taxpayers. NC House Bill 46 would restore a portion of the medical expense deductions to people over 65 in North Carolina. AARP supports full restoration of the medical expense deductions and seeks a hearing on this bill as a start to restoring lost deductions for all North Carolinians.

Tell the North Carolina State House Finance Committee Chairmen to allow NC House Bill 46 to be heard in committee and ask Finance members to support it with an amendment to completely restore all medical deductions.