text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Tax Relief for Long-Term Care Act of 
  2008''.
  
  SEC. 2. CREDIT FOR LONG-TERM CARE INSURANCE PREMIUMS AND 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 LONG-TERM CARE INSURANCE PREMIUMS AND 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 sum of--
                      ``(A) eligible long-term care premiums (as defined 
                  in section 213(d)(10)) paid during the taxable year for 
                  coverage for the taxpayer and the taxpayer's spouse and 
                  dependents under a qualified long-term care insurance 
                  contract (as defined in section 7702B(b)); and
                      ``(B) the long-term care amount multiplied by the 
                  number of applicable individuals with respect to whom 
                  the taxpayer is an eligible caregiver for the taxable 
                  year.
              ``(2) Long-term care amount.--For purposes of paragraph 
          (1), the long-term care amount shall be determined in 
          accordance with the following table:
  
  ``For taxable years                                       The long-term
     beginning in calender year--                        care amount is--
          2009...............................................     $1,000 
          2010...............................................     $1,500 
          2011...............................................     $2,000 
          2012...............................................     $2,500 
          2013 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) Coordination.--For purposes of this section, the 
          reduction under paragraph (1) shall be treated as first being a 
          reduction in the long-term care amount to the extent thereof.
              ``(4) Indexing.--In the case of any taxable year beginning 
          in a calendar year after 2009, 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 2008' for `August 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.
                  Notwithstanding the preceding sentence, a certification 
                  shall not be treated as valid unless it is made within 
                  the 39\1/2\ month period ending on such due date (or 
                  such other period as the Secretary prescribes).
                      ``(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(c) for the taxable year.
                              ``(iv) An individual who would be described 
                          in clause (iii) for the taxable year if the 
                          requirements of subparagraph (B) are met with 
                          respect to the individual in lieu of the 
                          support test under subsection (c)(1)(D) or 
                          (d)(1)(C) of section 152.
                      ``(B) Residency test.--The requirements of this 
                  subparagraph are met if an individual has as his 
                  principal place of abode the home of the taxpayer and--
                              ``(i) in the case of an individual who is 
                          an ancestor or descendant of the taxpayer or 
                          the taxpayer's spouse, is a member of the 
                          taxpayer's household for over half the taxable 
                          year, or
                              ``(ii) in the case of any other individual, 
                          is a member of the taxpayer's household for the 
                          entire taxable year.
                      ``(C) 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 adjusted gross 
                          income 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.
      ``(f) 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) Conforming Amendments.--
              (1) Section 6213(g)(2) of such Code is amended by striking 
          ``and'' at the end of subparagraph (L), by striking the period 
          at the end of subparagraph (M) and inserting ``, and'', and by 
          inserting after subparagraph (M) the following new 
          subparagraph:
                      ``(N) 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 long-term care insurance premiums and 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, 2008.
target: Tax Relief for Long-Term Care Act of 2008 - Amends the Internal Revenue Code to allow a tax credit for long-term care insurance premiums and for care provided by a caregiver to a family member or dependent with long-term care needs who resides with such caregiver. Phases in a maximum credit amount of $3,000 between 2009 and 2013. Reduces such credit amount for a taxpayer whose adjusted gross income exceeds $75,000 ($150,000 in the case of a joint return).
feat_title: To amend the Internal Revenue Code of 1986 to provide for a credit for long-term care insurance premiums and for taxpayers with long-term care needs.