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Creates a nonrefundable caregiver tax credit equal to 30% of qualified care expenses over $2,000, capped at $5,000 (indexed).
Official title: To amend the Internal Revenue Code of 1986 to provide a tax credit for working family caregivers.
Introduced March 11, 2025 by Mike Carey · Last progress March 11, 2025
The bill expands and indexes a tax credit that materially lowers out-of-pocket costs for many family caregivers and supports paid care, but its nonrefundable design and documentation/administration requirements leave the poorest caregivers with little benefit and add compliance burdens.
Working family caregivers (parents, middle- and low-income families, and those caring for seniors or people with disabilities) receive a tax credit equal to 30% of qualifying care expenses above $2,000 (up to a $5,000 cap), lowering out-of-pocket costs for home- and community-based care.
Caregivers (parents, families, people with disabilities, and seniors) can claim a wide range of expenses—respite, home modifications, assistive technology, transportation, and counseling—expanding financial support for non-institutional care.
People who hire paid caregivers or take time off work (working caregivers and families) can treat paid caregiver wages and verified lost wages as qualified expenses, helping households afford hired assistance or paid leave.
Low-income taxpayers and caregivers with little or no income may receive no benefit because the credit is nonrefundable, leaving the poorest caregivers without relief despite eligible expenses.
Taxpayers, licensed practitioners, employers, and the IRS face added paperwork and verification burdens (practitioner IDs, recipient TINs, substantiation) that can delay claims and increase compliance costs.
Families using ABLE accounts or other tax-advantaged benefits may see reduced relief because ABLE contributions are excluded and qualified expenses are reduced by other benefits, limiting the credit’s usefulness for some households managing disability-related savings.
Based on analysis of 2 sections of legislative text.
Creates a new nonrefundable tax credit for working family caregivers equal to 30% of qualifying care expenses above $2,000, with a maximum credit of $5,000 per year (adjusted for inflation). The credit applies to individuals with earned income above $7,500 who pay for care of a certified family member or spouse with long‑term care needs. Defines which relatives qualify as care recipients and sets medical certification and duration rules for long‑term care needs, plus age‑tiered functional criteria for infants, young children, and older children/adults. The credit is added to the Internal Revenue Code as a new section and includes inflation adjustment rules for the maximum credit cap starting after 2025.