Sponsor
Josh Harder
Representative · D-CA
Representative · D-CA
The bill offers meaningful, targeted tax relief that lowers many caregivers' out-of-pocket costs and preserves value over time, but its nonrefundable structure, income phaseouts, a $10,000 cap, and added documentation requirements mean some low‑income families and those with very high care needs will still face significant gaps and burdens.
Parents, family caregivers, and people who pay for care can reduce their federal tax liability by claiming a credit equal to 30% of qualified caregiving expenses above $2,000 (up to a $10,000 cap), directly lowering the after-tax cost of caregiving.
Caregivers can use the credit for a broad set of caregiving costs — respite, training, assistive technology, home modifications, travel, and verified lost wages — reducing out-of-pocket spending on many common and necessary care items and services.
Taxpayers claiming the credit will have the benefit indexed to medical-cost inflation after 2026, which helps preserve the credit’s real value over time against rising health and care costs.
Families with very high care needs (high-cost or intensive caregiving) are likely to exceed the $10,000 cap, leaving substantial caregiving expenses uncovered.
Low-income taxpayers with little or no income tax liability cannot receive the credit as a refundable payment, so the most financially strained caregivers may not get the full monetary relief.
A phased reduction in benefit for households with modified adjusted gross income above $75,000 (or $150,000 for joint filers) reduces or eliminates assistance for some middle‑income caregivers.
Based on analysis of 2 sections of legislative text.
Creates a new nonrefundable tax credit equal to 30% of qualified caregiving expenses above $2,000, capped at $10,000 per taxpayer (indexed after 2026).
Creates a new nonrefundable tax credit for "working family caregivers" equal to 30% of qualified caregiving expenses above $2,000 per year, capped at $10,000 per taxpayer (indexed for medical-care inflation after 2026). It defines who qualifies as an eligible caregiver and a qualified care recipient, requires a licensed health care practitioner certification that the recipient has long-term care needs, and outlines age-tiered functional criteria and what counts as qualified expenses. The credit targets working taxpayers with earned income above $7,500 who pay for care of dependents (spouses or relatives in the section 152(d)(2) list). It is a tax-code change—creating a new Internal Revenue Code section 25G—and includes certification, documentation, and definitions that determine eligibility, benefit size, and limits.
Official title: To amend the Internal Revenue Code of 1986 to provide a tax credit for working family caregivers.
Introduced October 31, 2025 by Josh Harder · Last progress October 31, 2025