An Act To Provide Tax Credits for Adult Day Care and Respite and Hospice Care
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5218, as amended by PL 2005, c. 519, Pt. DD, §§1 to 3, is further amended to read:
§ 5218. Income tax credit for child and adult care expenses
1. Resident taxpayer. A resident individual is allowed a credit against the tax otherwise due under this Part in the amount of 25% of the federal tax credit allowable for child and dependent care expenses in the same tax year , except that for tax years beginning in 2003, 2004 and 2005, the applicable percentage is 21.5% instead of 25% as modified under subsection 1-A.
1-A. Adult care expenses. The modified tax credit available under this section is equal to the federal tax credit allowable for child and dependent care expenses calculated as if it included expenses paid by the taxpayer for adult day care, respite care and hospice care.
2. Nonresident taxpayer. A nonresident individual is allowed a credit against the tax otherwise due under this Part in the amount of 25% of the federal tax credit allowable for child and dependent care expenses , as modified under subsection 1-A, multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as modified by section 5122 , except that for tax years beginning in 2003, 2004 and 2005, the applicable percentage is 21.5% instead of 25%.
2-A. Part-year resident taxpayer. An individual who files a return as a part-year resident in accordance with section 5224-A is allowed a credit against the tax otherwise due under this Part in the amount of 25% , except that for tax years beginning in 2003, 2004 and 2005 the applicable percentage is 21.5%, instead of 25%, of the federal tax credit allowable for child and dependent care expenses , as modified under subsection 1-A, multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.
3. Quality child care services. The credit provided by subsections 1, 2 and 2-A doubles in amount if the child care expenses were incurred through the use of quality child care services as defined in section 5219-Q, subsection 1.
4. Refund. The credit allowed by this section may result in a refund of up to $500. In the case of a nonresident individual, the refundable portion of the credit may not exceed $500 multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as modified by section 5122. In the case of an individual who files a return as a part-year resident in accordance with section 5224-A, the refundable portion of the credit may not exceed $500 multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.
SUMMARY
This bill expands the income tax credit for child and dependent care expenses to include expenses paid for adult day care, respite care and hospice care.