Whitmer floats $5,000 caregiver tax credit
Lansing — Michigan Gov. Gretchen Whitmer on Wednesday proposed a $5,000 tax credit that would benefit caregivers, allowing eligible residents to write off the cost of transportation, counseling, respite and nursing services on their state income taxes.
In her annual State of the State address, Whitmer said her proposed Caring for MI Family Tax Credit could be used by parents of children with long-term needs or senior citizens who want to remain in their homes, but need costly in-home care.
The proposal was an acknowledgment of the challenges facing Michigan's aging population, which ranked 13th oldest in the nation last year with a median age of 40. In 2000, the median age of a Michiganian was about 35.4 years old, according to U.S. census data.
"I know a lot of people are concerned about how much it'll take — or is taking — to care for aging parents, financially and emotionally," Whitmer said. "Maybe you're concerned about how your kids will take care of you while living their own lives."
More:Whitmer promises 'real change for people' in State of the State speech
The proposed tax credit would need approval from the Democratic-led Legislature and the overall cost to the state budget still is unknown. But the American Association of Retired Persons on Wednesday estimated nationwide family caregivers provide about $522 billion in uncompensated care annually.
The Democratic governor is expected to provide further details on the cost to the state program and who would qualify during her Feb. 7 budget presentation to the Legislature for the fiscal year that begins Oct. 1.
In speaking about the proposal Wednesday, Whitmer noted the challenges she faced as a young legislator more than 20 years ago when she was attempting to take care of her newborn daughter and her mother who was dying from brain cancer.
"I was pushed to my limit despite having resources and help," Whitmer said.
AARP Michigan estimated there are around 1.7 million Michigan residents currently providing care to a loved one. Nationally, family caregivers are believed to spend about $7,242 of their own income each year to provide that care.
A survey from Glengariff Group in 2022 found women and those older than 50 in Metro Detroit were most likely to be caregivers. The average caregiver gets help from friends or families, but more than a third — 180 of the survey's 500 Metro Detroit respondents — reported having no other help.
More than half of all people at every income level in Metro Detroit reported having out-of-pocket expenses for caregiving, according to the survey, including 56% of people with a household income of more than $100,000 a year and 60% of those making less than $20,000 annually.
The survey of 1,000 caregivers was sponsored by the New York & Michigan Solutions Journalism Collaborative and included 500 caregivers from Wayne, Oakland and Macomb counties in Metro Detroit and 500 from three counties in western New York.
"This policy is more than financial relief; it's a statement of our values and commitment to the well-being of all Michiganders," said Paula D. Cunningham, state director for AARP Michigan.
Lawmakers said they were awaiting the governor's executive budget recommendation to learn more about the program.
But House Speaker Joe Tate said he was confident the budget could absorb the caregiver credit and other proposed tax incentive initiatives.
Whitmer on Wednesday also proposed taxpayer-funded Pre-K and community college for all, a state-funded rebate for new car purchases, a tax-funded innovation program to invest in startups, an income tax capture program to create job growth and a research and development tax credit — all programs that would deplete the state's coffers.
Tate, D-Detroit, noted the state last year was able to cut taxes for some retirees and expand the Earned Income Tax Credit without major stress on state finances.
"What we've seen from our (economic) forecast is that we have a stable balance sheet," Tate said. "... I think we could potentially continue to do that. But we'll see how the deliberations go in terms of the budget process."
Sen. Sylvia Santana, D-Detroit, said she plans to work with the governor to find ways to acknowledge the sacrifices made by Michigan caregivers.
“All Michigan families are feeling the pinch of increased costs right now, but that is especially true for people who are caring for a child, spouse, aging parent or other relative with a mental or physical disability," Santana said in a statement.
Oklahoma has the most comprehensive tax credit for caregivers in the nation. Last year, lawmakers passed the Caregiving for Caregivers Act, which provides $2,000 in tax relief for a family caregiver’s out-of-pocket costs annually and $3,000 for those caring for a veteran or a person with dementia.
Other states offer tax credits for caregivers, but the benefits are narrow. New Jersey has a “Wounded Warrior” tax credit that provides a maximum $675 credit to caregivers of veterans. South Carolina covers expenses for nursing home care.
eleblanc@detroitnews.com
Staff Writer Hayley Harding contributed.
This story was produced with support from the New York & Michigan Solutions Journalism Collaborative, a partnership of news organizations and community partners dedicated to rigorous and compelling reporting about successful responses to social problems. The group is supported by the Solutions Journalism Network. Read related stories atnymisojo.com. The collaborative also has compiled a detailed Caregiving Resource Guide with links to online information about various issues of interest to caregivers.