Caregiver Tax Credit Act
Neb. Rev. Stat. §§ 77-3163 to 77-3166
LB 937 (2024) (Sections 56 through 59). Operative for taxable years beginning on or after January 1, 2025.
The Caregiver Tax Credit Act (Act) establishes a nonrefundable tax credit for family caregivers who provide care and support to an eligible family member for tax years beginning on or after January 1, 2025, that requires an application filed with the Nebraska Department of Revenue (DOR).
Eligible family caregivers are individuals who provide care and support to an eligible family member and personally incur uncompensated expenses directly related to caring for an eligible family member. In addition, family caregivers have federal adjusted gross income of less than $100,000 for married, filing jointly returns or $50,000 for all other returns.
Eligible family members include a dependent, spouse, parent, or other relation by blood or marriage of the family caregiver who lives in a private residence and requires assistance with at least two activities of daily living as certified by a licensed health care provider. Activities of daily living include:
(a) Ambulating, which is the extent of the ability of an individual to move from one position to another and walk independently;
(b) Feeding, which is the ability of an individual to feed oneself;
(c) Dressing, which is the ability of an individual to select appropriate clothes and to put the clothes on without aid;
(d) Personal hygiene, which is the ability of an individual to bathe and groom oneself and maintain dental hygiene and nail and hair care;
(e) Continence, which is the ability to control bladder and bowel function; and
(f) Toileting, which is the ability of an individual to get to and from the toilet without aid, using it appropriately, and cleaning oneself.
Family members living in an assisted-living center, nursing facility, or residential care home are not eligible.
The tax credit will equal 50% of the eligible expenditures incurred by the family caregiver during the taxable year with a maximum credit of $2,000, or $3,000 if the eligible family member is a veteran or is diagnosed with dementia. The eligible expenditure must be directly related to assisting the family caregiver in providing care to an eligible family member. The definition of eligible expenditure includes:
- The improvement or alteration to the primary residence of the family caregiver or eligible family member to permit the eligible family member to live in the residence and to remain mobile, safe, and independent;
- The purchase or lease of equipment by the family caregiver, including, but not limited to, durable medical equipment, that is necessary to assist an eligible family member in carrying out one or more activities of daily living; and
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Other paid or incurred expenses by the family caregiver that assist the family caregiver in providing care to an eligible family member such as expenditures related to:
(A) Hiring a home care aide;
(B) Respite care;
(C) Adult day care;
(D) Personal care attendants;
(E) Health care equipment; and
(F) Technology.
Eligible expenditure does not include general household maintenance activities such as painting, plumbing, electrical repairs, or exterior maintenance. If two or more family caregivers claim the credit for the same eligible family member, the maximum credit will be allocated equally between family caregivers. Any unused credit cannot be carried forward.
Family caregivers must apply for the tax credit with DOR. If approved, DOR will certify the tax credits to the family caregiver. DOR will process applications in the order received based on the following annual limitations for the State fiscal year:
- July 1, 2025 to June 30, 2026 $1,500,000
- July 1, 2026 to June 30, 2027 $1,500,000
- State fiscal years after $2,500,000
For the 2025 taxable year, DOR began accepting applications in February 2025, for eligible expenditures made on or after January 1, 2025.
Instructions to Apply for the Tax Credit
The Family Caregiver is required to apply for the credit by submitting the Family Caregiver Tax Credit Application, Form 3165, the Licensed Health Care Provider Certification for the Family Caregiver Tax Credit Application, Form 3165C to DOR along with any required documentation, including documentation supporting the eligible expenditures. DOR will process the applications in the order received until the amount of the certified credits reaches the annual limit.
- Family Caregiver Tax Credit Application, Form 3165
- Licensed Health Care Provider Certification for the Family Caregiver Tax Credit Application, Form 3165C
Tax Credit Authorization Table
Contact Information
Mary Kate Kincaid
Attorney, Policy Section
Nebraska Department of Revenue
301 Centennial Mall South
PO Box 94818
Lincoln, NE 68509-4818
402-471-5921
marykate.kincaid@nebraska.gov
