Sponsors (84)
The bill gives many family caregivers meaningful tax help and expands the types of covered care, but it leaves the poorest caregivers without refunds, limits benefits as incomes rise, and adds paperwork and administrative burdens.
Working family caregivers (parents, middle-class and low-income caregivers) receive a new tax credit equal to 30% of qualifying care expenses above $2,000, up to $5,000, lowering out-of-pocket costs for caregiving.
Caregivers of people with disabilities and older adults can claim a broad set of services (respite, home modifications, assistive technology, transportation, counseling), expanding financial support for home- and community-based care.
Families who hire paid caregivers or who incur lost wages for caregiving can treat direct care worker costs and verified lost wages as qualified expenses, making paid help or paid time off more affordable.
Low-income taxpayers with little or no tax liability may receive no benefit because the credit is nonrefundable, leaving some caregivers with substantial expenses without relief.
Middle- and upper-income caregivers face phaseouts that reduce the credit by $100 for each $1,000 above thresholds, limiting relief for some families with significant care costs.
New certification, substantiation, and reporting requirements (practitioner ID, recipient TIN) plus additional IRS/employer administration create extra paperwork, compliance costs, and potential delays for taxpayers, providers, employers, and the IRS.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable tax credit equal to 30% of qualifying family caregiving expenses over $2,000, capped at $5,000 per year, with eligibility and certification rules.
Creates a new nonrefundable tax credit for working family caregivers equal to 30% of qualifying caregiving expenses above $2,000, capped at $5,000 per year (with future inflation adjustments). To claim the credit, a taxpayer must have earned income above $7,500 and pay or incur qualified expenses for a family member who is certified by a licensed health care practitioner as having long‑term care needs for at least 180 consecutive days; the bill sets age‑tiered functional criteria for that certification and establishes timing rules for certification.
Introduced March 11, 2025 by Mike Carey · Last progress March 11, 2025