Fiscal Cliff Update

Now that the dust has settled and the risk of going over the “fiscal cliff” has passed for the time being, it is time to look at some of the things that the American Taxpayer Relief Act of 2012 did.

Estate Tax. The federal estate tax exemption for 2013 will be $5,250,000. Had Congress not passed the Act, the estate tax exemption for 2013 would have dropped to $1,000,000. This would have put many estates at risk for a substantial federal estate tax liability which, by the way, was increased by the Act from 35% to 40%.

Income Tax. The Act made the Bush era tax cuts permanent for individuals making less than $400,000 per year and married couples making less than $450,000 per year. For individuals making $400,000 or more and married couples making $450,000 or more, the maximum income tax rate increased from 35% to 39.6%.

In addition, the “Social Security tax holiday” has officially ended resulting in a 2% increase in Social Security taxes in 2013.

Long Term Care. The Act established the fifteen member Commission on Long Term Care which is charged with developing “a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high quality system that ensures availability of long term care services and supports.”

This is a very brief summary of some of the things which the Act did. Significantly, it did not address the federal debt limit or the upcoming mandatory federal government spending cuts which will likely have a major impact on all of us.

CHOICE – A Home Care Alternative

While many of my clients are in need of skilled nursing care that can only be provided in a long term care facility, many are simply in need of a little extra help at home. For those individuals Indiana’s Community and Home Options to Institutional Care for the Elderly and Disabled Program, commonly known as CHOICE, (www.in.gov/fssa/da/3508.htm ) can help meet their needs.

The CHOICE program is available to Indiana residents who are 60 years of age or older or who are disabled and might be at risk of losing independence, which is determined by an inability to perform 2 or more activities of daily living.

To qualify for the CHOICE program you must have countable assets under $500,000.

To apply for the CHOICE program, you need to contact your local Agency on Aging. In Lafayette that is the Area IV Agency on Aging.

If you qualify and are accepted into the CHOICE program, you may be eligible for

Homemaker services and attendant care

  • Respite care
  • Adult day care
  • Home health care
  • Home delivered meals
  • Transportation
  • Minor home modifications

Adaptive aids necessary to prevent institutionalization

If you receive CHOICE services, you will only pay for services if your income exceeds 150% of the federal poverty level. In 2010 that amount is $10,830 for an individual and $14,570 for a married couple.

Funding for the CHOICE program is limited. So if you are interested, you should contact your Agency on Aging.