First-of-its-kind legislation that gives an expansive tax credit to Oklahoma family caregivers took effect Jan. 1.

For the 2024 tax year, unpaid family caregivers will be able to claim up to $2,000 or $3,000 in tax credits for out-of-pocket costs incurred for eligible expenses, depending upon the person for whom they are providing care.

House Majority Leader Tammy West, R-Oklahoma City, shepherded House Bill 1029XX – the Caring for Caregivers Act – through the Legislature last session.

“While caregiving is a labor of love, it can come at a great financial toll,” West said. “I’m thrilled to be able to offer this tax relief to our Oklahoma family caregivers. This will help ensure their loved ones can stay in their homes when their health is failing, eliminating the need for the much more costly option and the added emotional burden of being cared for in a taxpayer- funded nursing home.”

The tax credit is up to 50% of eligible caregiver costs, including home modifications such as installing a ramp, durable medical equipment, assistive technologies, home health services and more.

The credit is capped at $2,000 per year for family caregivers with a federally adjusted gross income below $50,000 for single filers or $100,000 for joint filers. Those caring for veterans or people with a dementia-related diagnosis are eligible for up to $3,000 per year. The total cap for the state is $1.5 million per year.

Individuals must qualify as a dependent, spouse, parent or other relation by blood or marriage to the family caregiver. Oklahomans receiving care from a family caregiver must be 62 years of age or older and require assistance with at least two activities of daily living as certified by a licensed health care provider.

Other states offer smaller tax credits to certain caregivers or for expenses like home modifications, but AARP reports Oklahoma is the first to adopt the more expansive credit.

According to AARP, Oklahoma has 490,000 family caregivers that provide a staggering $6.6 billion in unpaid care with the average individual spending an estimated $7,200 a year on expenses related to their duties. That’s on top of the emotional and physical challenges that often come with providing unpaid care for an older loved one. A recent AARP survey shows 93% of Oklahoma family caregivers pay out-of-pocket expenses for things such as transportation, medical equipment, home modifications, hiring in-home support services and providing respite services.

To learn more about Oklahoma’s new family caregiver tax credit and frequently asked questions visit: www.aarp.org/ OKCaregiverTaxCredit