Here's a closer look at the Democratic presidential candidates’ long-term care plans:
about 80 percent of those 75 and older paid no federal income tax. For them, a non-refundable credit would be worthless. For those who pay only a small amount of federal income tax, the credit would have limited value because it could not exceed their income tax liability.
As a result, non-refundable caregiver credits such as Biden and Klobuchar are proposing would benefit relatively few families. What about Klobuchar’s refundable credit for care recipients? It would benefit more low-income older adults. But would a few thousand dollars be meaningful to someone whose annual cost of care could easily approach $100,000? For example, a $5,000 credit might pay for 4 or 5 hours a week of home care, or about 2 weeks in a nursing home. Not nothing. But not a lot.
Credits to subsidize the cost of long-term care insurance raise similar questions. A 60-year old woman who buys a good long-term care insurance policy can expect to pay something like $4,000 in annual premiums. A 20 percent credit would save her $800. A few more people would buy if their after-tax cost is only $3,200. But many? It is unlikely.
I’m also concerned about the sheer number of tax credits Klobuchar is proposing. Three separate credits with three separate sets of rules will confuse families and lead to mistakes, and even discourage people from claiming benefits simply because they don’t understand them. This is anSenators Bernie Sanders and Elizabeth Warren , would roll home-based long-term care into their
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