Sponsors
The bill gives targeted tax relief to working caregivers and recognizes a wide range of caregiving costs (including some lost wages), but it excludes the poorest caregivers through nonrefundable and earned-income rules and adds verification, overlap rules, and administrative complexity that may limit access and increase costs.
Working caregivers (parents, families, and other taxpayers who earn income) can claim a credit equal to 30% of qualified caregiving expenses above $2,000—reducing taxes up to $10,000 per taxpayer—providing substantial direct financial relief for those who pay for care.
Caregivers of people with disabilities and seniors, and families paying for care, can treat a broad set of costs as qualified expenses (respite, counseling, assistive technology, home modifications, paying direct care workers) and—when employer-verified—lost wages and travel associated with caregiving, lowering out-of-pocket caregiving burdens.
Middle- and lower-income caregivers are prioritized because the credit phases out above defined income thresholds, limiting subsidies to higher-income households.
Low-income caregivers and those without sufficient tax liability (or without earned income over $7,500) may receive little or no benefit because the credit is nonrefundable and requires earned income and certain dependent eligibility, excluding some caregivers (e.g., those caring for adults without qualifying child dependents or those with minimal earnings).
Families and health providers will face added paperwork and verification burdens because eligibility requires certification by a licensed practitioner within a timeframe and reporting practitioner ID, which can limit access and add friction to claiming the credit.
Taxpayers must reduce eligible expenses by amounts claimed under other tax provisions (e.g., sections 21, 213, 129, 223, 529A), which increases complexity and can reduce the effective benefit for those already using other tax breaks for care or education.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable tax credit equal to 30% of qualified care expenses over $2,000 (up to $10,000 per taxpayer, inflation‑adjusted after 2026) for eligible working caregivers.
Introduced October 31, 2025 by Josh Harder · Last progress October 31, 2025
Creates a new nonrefundable tax credit for "working family caregivers" equal to 30% of qualified care expenses above $2,000, capped at $10,000 per taxpayer (indexed for inflation after 2026). The credit is available only to taxpayers who have a qualifying child dependent, earn more than $7,500 in the year, and who pay qualified care expenses for a spouse or relative who has been certified by a licensed health care practitioner as having long‑term care needs for at least 180 consecutive days.