STATE OF NEW JERSEY
PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION
Assemblywoman VALERIE VAINIERI HUTTLE
District 37 (Bergen)
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
Allows refundable gross income tax credit for certain unreimbursed hearing aid expenses.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act allowing a refundable New Jersey gross income tax credit for certain taxpayers’ unreimbursed expenses for purchases of certain hearing aids, and supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A resident taxpayer with a gross income of less than $150,000 for the taxable year shall be allowed a refundable credit against the tax otherwise due under N.J.S.54A:1-1 et seq. for the taxpayer's unreimbursed expenses incurred during the taxable year for the purchase of an appropriate and medically necessary hearing aid for use by the taxpayer, the taxpayer's spouse or taxpayer's dependent. The credit amount shall be limited to unreimbursed expenses of $1,000 for each appropriate and medically necessary hearing aid, indexed to the annual change in the Consumer Price Index for All Urban Consumers, U.S. City Average, as published by the Bureau of Labor Statistics within the United States Department of Labor. A credit shall not be allowed under this section if the taxpayer's primary residence has been in New Jersey for less than twelve months prior to incurring the expense for an appropriate and medically necessary hearing aid and a credit shall not be allowed under this section for hearing aid expenses for the same individual in consecutive taxable years.
b. As used in this act:
"Appropriate and medically necessary" means a hearing aid as prescribed or recommended by a State licensed audiologist or a hearing aid dispenser licensed pursuant to P.L.1973, c.19 (C.45:9A-1 et seq.) in accordance with generally accepted standards of health care practice; and
"Hearing aid" means an ear-level or body-worn electroacoustic amplifying device designed to make sounds audible to a hearing-impaired individual whose basic components are a microphone, amplifier, and receiver.
c. A taxpayer claiming a credit under this section shall submit a claim for the credit and accompany that claim with evidence of the purchase of an appropriate and medically necessary hearing aid, documentation on any reimbursement received for the cost of the purchase, and such other information as the Director of the Division of Taxation in the Department of the Treasury may require. The director, in consultation with the Commissioner of Health and Senior Services, shall promulgate regulations necessary to effectuate the purposes of this act pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). The director shall establish a procedure to enable verification of the claimant's unreimbursed expenses for an appropriate and medically necessary hearing aid.
d. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under N.J.S.54A:1-1 et seq., after all other credits and payments. If the credit exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7.
2. This act shall take effect immediately and shall apply to taxable years commencing on or after January 1 next following the date of enactment.
This bill represents a commitment by the State of New Jersey to enhance the quality of life of hearing-impaired New Jerseyans who all too often withdraw from family, friends, and society, as their ever exacerbating hearing loss precludes them from engaging in meaningful conversation. This withdrawal is particularly frustrating when a hearing aid could mitigate the problem if the taxpayer only had the financial resources to make such a purchase.
To terminate the involuntary seclusion of the hard of hearing, this bill provides for the State to assume by means of a refundable gross income tax credit that portion of a taxpayer's outlay for a hearing aid, up to $1,000 per device adjusted annually for inflation, for which the taxpayer has not received a reimbursement by another party. To qualify for the credit, the hearing aid must be for use by the taxpayer, the taxpayer's spouse or a dependent of the taxpayer and it must be prescribed or recommended by a State licensed audiologist or a hearing aid dispenser in accordance with generally accepted standards of health care practice. Moreover, the taxpayer must have resided in New Jersey for at least 12 months prior to the hearing aid purchase and the taxpayer’s annual New Jersey gross income must be less than $150,000. In addition, no taxpayer can claim the credit for hearing aid expenses for the same individual in consecutive taxable years. The credit is refundable so that the State does not discriminate against hearing-impaired New Jerseyans without a tax liability when assisting in the acquisition of direly needed hearing aids.
According to Self Help for Hard of Hearing People (SHHH), 30 percent of the national hearing loss population cannot afford a hearing aid in part because Medicare and most commercial insurance companies do not provide coverage. Indeed, the Better Hearing Institute's MarkeTrak VIII: 25-Year Trends in the Hearing Health Market survey relates that only 39.7 percent of hearing aid purchases transpired with a third-party payment in 2008, yet that the number declined further to 30.0 percent when Veterans Administration fittings were excluded. A hearing-impaired individual without hearing aid coverage faced an average price of $1,986 per device in 2007, as relayed by the 2008 Hearing Journal/Audiology Online dispenser survey, regardless of ability to pay. The average unreimbursed cost of a hearing aid, on the other hand, was $1,601 in 2008, as reported in the Better Hearing Institute's survey.
The Institute’s survey further indicates that 34 million Americans suffered from hearing loss in 2008. The survey’s 2004 edition projected the prevalence of hearing loss to rise to 41 million by 2025 and 52.9 million by 2050, as the 65 years of age and older population segment in which hearing loss is most common is expected to grow substantially. Without affordable hearing aids, these Americans will see their quality of life erode as their ability to hear and thus to participate in life wanes as a result of their inability to pay for a hearing aid.