Text: H.R.6234 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in House (09/28/2010)


111th CONGRESS
2d Session
H. R. 6234


To amend the Internal Revenue Code of 1986 to allow individuals a deduction for qualified long-term care insurance premiums, a credit for individuals who care for those with long-term care needs, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES

September 28, 2010

Ms. Herseth Sandlin (for herself and Mr. Hinchey) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the Internal Revenue Code of 1986 to allow individuals a deduction for qualified long-term care insurance premiums, a credit for individuals who care for those with long-term care needs, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Comprehensive Long-Term Care Support Act of 2010”.

SEC. 2. Findings.

The Congress hereby finds:

(1) As our Nation’s seniors live longer lives, the United States faces a major challenge in long-term health care needs.

(2) The United States does not have a comprehensive system to support long-term care needs.

(3) Eighty-six percent of people age 85 and older have at least one chronic condition which can cause pain, disability, and loss of functioning.

(4) Long-term care is expected to place a huge burden on State Medicaid programs, which are the primary source of funding for nursing homes.

SEC. 3. Deduction for qualified long-term care insurance premiums.

(a) In general.—Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions) is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

“SEC. 224. Premiums on qualified long-term care insurance contracts.

“(a) In general.—In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable percentage of the amount of eligible long-term care premiums (as defined in section 213(d)(10)) paid during the taxable year for coverage for the taxpayer or any member of the family of the taxpayer under a qualified long-term care insurance contract (as defined in section 7702B(b)).

“(b) Applicable percentage.—For purposes of subsection (a), the applicable percentage shall be determined in accordance with the following table:


“The taxable years beginning in calendar year: The applicable percentage is:
   
2011 50
2012 75
2013 or thereafter 100.

“(c) Member of the family.—For purposes of this section, the term ‘member of the family’ means, with respect to any individual—

“(1) the spouse of the individual,

“(2) an ancestor or lineal descendant of the individual or the individual’s spouse,

“(3) a brother or sister of the individual or any individual described in paragraph (1) or (2), and

“(4) the spouse of any individual described in paragraph (2) or (3).

“(d) Coordination with other deductions.—Any amount paid by a taxpayer for any qualified long-term care insurance contract to which subsection (a) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 162(l) or 213(a).”.

(b) Long-Term care insurance permitted To be offered under cafeteria plans and flexible spending arrangements.—

(1) CAFETERIA PLANS.—

(A) Section 125(f) of the Internal Revenue Code of 1986 (defining qualified benefits), as in effect for taxable years beginning before January 1, 2014, is amended by inserting before the period at the end “; except that such term shall include the payment of premiums for any qualified long-term care insurance contract (as defined in section 7702B) to the extent the amount of such payment does not exceed the eligible long-term care premiums (as defined in section 213(d)(10)) for such contract”.

(B) Section 125(f)(2) of such Code, as in effect for taxable years beginning after December 31, 2013, is amended by inserting before the period at the end “; except that such term shall include the payment of premiums for any qualified long-term care insurance contract (as defined in section 7702B) to the extent the amount of such payment does not exceed the eligible long-term care premiums (as defined in section 213(d)(10)) for such contract”.

(2) FLEXIBLE SPENDING ARRANGEMENTS.—Section 106 of such Code (relating to contributions by an employer to accident and health plans) is amended by striking subsection (c).

(c) Conforming amendments.—

(1) Section 62(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (21) the following new item:

“(22) PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.—The deduction allowed by section 224.”.

(2) The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items:


“Sec. 224. Premiums on qualified long-term care insurance contracts.

“Sec. 225. Cross reference.”.

(d) Effective dates.—The amendments made by this section shall apply to taxable years beginning after December 31, 2010.

SEC. 4. Credit for taxpayers with long-term care needs.

(a) In general.—Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:

“SEC. 25E. Credit for taxpayers with long-term care needs.

“(a) Allowance of credit.—

“(1) IN GENERAL.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable credit amount multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year.

“(2) APPLICABLE CREDIT AMOUNT.—For purposes of paragraph (1), the applicable credit amount shall be determined in accordance with the following table:


“For taxable years beginning in calendar year: The applicable credit amount is:
   
2011 $1,000
2012 $1,500
2013 $2,000
2014 $2,500
2015 or thereafter $3,000.

“(b) Limitation based on adjusted gross income.—

“(1) IN GENERAL.—The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $100 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of the preceding sentence, the term ‘modified adjusted gross income’ means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.

“(2) THRESHOLD AMOUNT.—For purposes of paragraph (1), the term ‘threshold amount’ means—

“(A) $150,000 in the case of a joint return, and

“(B) $75,000 in any other case.

“(3) INDEXING.—In the case of any taxable year beginning in a calendar year after 2011, each dollar amount contained in paragraph (2) shall be increased by an amount equal to the product of—

“(A) such dollar amount, and

“(B) the medical care cost adjustment determined under section 213(d)(10)(B)(ii) for the calendar year in which the taxable year begins, determined by substituting ‘August of 2010’ for ‘August of 1996’ in subclause (II) thereof.

If any increase determined under the preceding sentence is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50.

“(c) Definitions.—For purposes of this section—

“(1) APPLICABLE INDIVIDUAL.—

“(A) IN GENERAL.—The term ‘applicable individual’ means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period—

“(i) which is at least 180 consecutive days, and

“(ii) a portion of which occurs within the taxable year.

Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the 39½ month period ending on such due date (or such other period as the Secretary prescribes) a physician (as so defined) has certified that such individual meets such requirements.

“(B) INDIVIDUALS WITH LONG-TERM CARE NEEDS.—An individual is described in this subparagraph if the individual meets any of the following requirements:

“(i) The individual is at least 6 years of age and—

“(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, or

“(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to preform, without reminding or cuing assistance, at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities.

“(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform (without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility.

“(iii) The individual is under 2 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) ELIGIBLE CAREGIVER.—

“(A) IN GENERAL.—A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals:

“(i) The taxpayer.

“(ii) The taxpayer’s spouse.

“(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151 for the taxable year.

“(iv) An individual who would be described in clause (iii) for the taxable year if section 152(d)(1)(B) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied.

“(v) An individual who would be described in clause (iii) for the taxable year if the requirements of clause (iv) are met with respect to the individual and section 152(c)(1) were applied without regard to subparagraph (D).

“(B) SPECIAL RULES WHERE MORE THAN 1 ELIGIBLE CAREGIVER.—

“(i) IN GENERAL.—If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section.

“(ii) NO AGREEMENT.—If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest modified adjusted gross income (as defined in section 32(c)(5)) shall be treated as the eligible caregiver.

“(iii) MARRIED INDIVIDUALS FILING SEPARATELY.—In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).

“(d) Identification requirement.—No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.

“(e) Taxable year must be full taxable year.—Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months.”.

(b) Conforming amendments.—

(1) Section 6213(g)(2) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of subparagraph (O), by striking the period at the end of subparagraph (P) and inserting “, and”, and by inserting after subparagraph (P) the following new subparagraph:

“(Q) an omission of a correct TIN or physician identification required under section 25E(d) (relating to credit for taxpayers with long-term care needs) to be included on a return.”.

(2) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item:


“Sec. 25E. Credit for taxpayers with long-term care needs.”.

(c) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2010.