HB1540
To Amend The Income Tax Credit And The Income Tax Deduction Related To Maintaining, Supporting, And Caring For An Individual With A Disability.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
Sponsors
AI-Generated Summary
House Bill 1540 modifies Arkansas income tax law concerning financial support for individuals with disabilities. The bill repeals an existing $500 income tax deduction previously available to taxpayers who provide home-based care for a child with a total and permanent disability. Concurrently, it doubles the existing income tax credit for taxpayers who support an individual with a developmental disability in their home, increasing the amount from $500 to $1,000 per year. The bill also updates the definition of 'developmental disability' to align with federal standards under 42 U.S.C. § 15002 and clarifies certification requirements by medical professionals. These changes are set to take effect for tax years beginning on or after January 1, 2025.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are taxpayers who provide home-based care for individuals with developmental disabilities, as they will receive an increased annual tax credit of $1,000. Additionally, the updated definition of 'developmental disability' may provide clearer guidelines for qualification, potentially simplifying the process for caregivers to claim the credit.
Who Might Suffer?
Taxpayers who previously claimed the $500 income tax deduction for caring for a child with a total and permanent disability will be negatively impacted, as that specific deduction is being repealed. If these individuals are caring for someone who does not meet the revised definition of a 'developmental disability,' they may lose their specific tax benefit entirely.
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