(a) For each taxable year beginning on or after January 1, 2020, and before January 1, 2025, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 50 percent of the amount paid or incurred by a family caregiver during the taxable year for eligible expenses, not to exceed five thousand dollars ($5,000), regardless of the type of return filed.
(b) For the purposes of this section:
(1) (A) “Eligible family member” means, with respect to any taxable year, an individual who has been certified, under penalty of perjury, before the due date for filing the return of tax for the taxable year, not subject to extensions, by a physician, as defined in Section 1861(r) of the Social Security Act, as being an individual with long-term care needs described in subparagraph (C) for a period that meets both of the following requirements:
(i) Is at least 180 consecutive days.
(ii) A portion of that period occurs within the taxable year.
(B) “Eligible family member” shall not include either of the following:
(i) An individual otherwise meeting the requirements of subparagraph (A) unless, within the 391/2-month period ending on that due date for the filing of the return of tax, or another period that the Franchise Tax Board prescribes, a physician, as defined in subparagraph (A), has certified, under penalty of perjury, that the individual meets those requirements.
(ii) An individual who has a monthly federal adjusted gross income of more than two thousand dollars ($2,000) for an individual or three thousand dollars ($3,000) for a joint return.
(C) An individual is described in this paragraph to have long-term care needs if that individual meets any of the following requirements:
(i) The individual is at least six years of age and meets either of the following requirements:
(I) The individual is unable to perform, without substantial assistance from another individual, at least three activities of daily living, as defined in Section 7702B(c)(2)(B) of the Internal Revenue Code, relating to activities of daily living, due to a loss of functional capacity.
(II) The individual requires substantial supervision to protect that individual from threats to health and safety due to severe cognitive impairment and meets either of the following additional requirements:
(ia) Is unable to perform at least one activity of daily living, as defined in Section 7702B(c)(2)(B) of the Internal Revenue Code, relating to activities of daily living .
(ib) To the extent provided by the Franchise Tax Board, in consultation with the Secretary of California Health and Human Services, is unable to engage in age-appropriate activities.
(ii) The individual is at least two years of age but less than six years of age and is unable, due to a loss of functional capacity, to perform, without substantial assistance from another individual, at least two of the following activities: eating, transferring, or mobility.
(iii) The individual is under two years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual’s condition to be available if the individual’s parents or guardians are absent.
(2) (A) “Family caregiver” means an individual who meets both of the following requirements:
(i) Incurs uncompensated expenses directly related to the care of an eligible family member.
(ii) Provides care to one or more eligible family members during the taxable year.
(B) In the case of a joint return, “family caregiver” includes the individual and the individual’s spouse.
(3) “Eligible expenses” includes all of the following that are directly related to assisting a family caregiver in providing care for an eligible family member in the state:
(A) The total amount expended by the family caregiver to retrofit an existing residence, provided that the retrofitting of the existing residence is designed to improve accessibility, or to provide universal visitability.
(B) Purchases or leases of equipment that is necessary to assist an eligible family member in carrying out one or more activities of daily living.
(C) Goods, services, or support that assists the family caregiver in providing care to an eligible family member, including, but not limited to, expenditures related to hiring a home care aide or personal care attendant, respite care, adult day care, transportation, legal and financial services, and for assistive technology to care for the eligible family member.
(c) Only one family caregiver may be allowed the credit provided by this section in a taxable year with respect to any one eligible family member.
(d) If the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding two years if necessary, until the credit is exhausted.
(e) (1) No credit shall be allowed under this section to a family caregiver with respect to any eligible family member unless the family caregiver includes the name and taxpayer identification number of the eligible family member, and the identification number of the physician certifying that eligible family member, on the return of tax for the taxable year.
(2) The denial of any credit under paragraph (1) may be made pursuant to Section 19051.
(f) The family caregiver shall retain the physician certification required by paragraph (1) of subdivision (b) and shall make that certification available to the Franchise Tax Board upon request.
(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board.
(h) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(i) The aggregate amount of credits that may be allocated pursuant to this section shall be an amount equal to the sum of the following:
(1) One hundred fifty million dollars ($150,000,000) in credits for each calendar year.
(2) The unused credit amount, if any, allocated in the preceding calendar year.
(j) For the purposes of this section, the Franchise Tax Board shall do both of the following:
(1) On or after January 1, 2020, and before January 1, 2025, allocate and certify tax credits to taxpayers on a first-come-first-served basis by determining and designating applicants who meet the requirements of this section.
(2) Once the credits allocated exceed the limit established in subdivision (i), the Franchise Tax Board shall cease to allocate and certify tax credits to taxpayers.
(k) This section shall become operative on the effective date of any budget measure specifically appropriating funds to the Franchise Tax Board for its costs to administer this section.
(l) This section is repealed on December 1, 2025.