Sponsors
The bill provides a targeted tax credit that lowers many caregivers' out-of-pocket costs and preserves its value over time, but nonrefundability, documentation burdens, income phaseouts, and a $10,000 cap leave important gaps for the lowest-income caregivers and those with very high or complex care needs.
Parents, families, and individual caregivers can reduce their federal tax liability by claiming a credit equal to 30% of qualified caregiving expenses above $2,000, subject to a $10,000 cap.
Caregivers (including parents and people with disabilities) can use the credit for a broad set of caregiving costs — respite, training, assistive technology, home modifications, travel, and verified lost wages — lowering out-of-pocket care expenses.
The credit’s amounts are indexed to medical-cost inflation after 2026, helping preserve the real value of the benefit over time for recipients.
Low-income individuals with little or no income tax liability cannot convert the credit into a refund because the credit is nonrefundable, so many low-income caregivers may receive little or no immediate cash benefit.
Families with intensive caregiving needs (parents, people with disabilities) may still face large uncovered costs because the $10,000 cap may not fully cover high caregiving expenses.
Substantial documentation and certification requirements (practitioner ID, care-recipient ID, receipts) increase administrative burden for caregivers and practitioners, raising time and compliance costs and potentially deterring claims.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable tax credit equal to 30% of qualified caregiving expenses over $2,000, capped at $10,000 per taxpayer (indexed after 2026).
Introduced October 31, 2025 by Josh Harder · Last progress October 31, 2025
Creates a nonrefundable tax credit for "working family caregivers" that covers 30% of qualified caregiving expenses above $2,000 in a year, with a per-taxpayer cap of $10,000 (indexed for medical-care inflation after 2026). To qualify, a caregiver must have earned income over $7,500, have a dependent who meets specified relationship and long-term care need rules, and obtain certification from a licensed health care practitioner that the dependent needs long-term care for at least 180 consecutive days.