To amend the Internal Revenue Code of 1986 to establish a credit for adult child caregivers.

Summary

Creates a new nonrefundable federal tax credit for married couples filing jointly who live with and provide care to qualifying older relatives. The credit is $2,000 per eligible relative (up to two relatives), subject to income phase-downs, coordination rules with existing dependent care credits, residency and caregiving time tests, and a Treasury–HHS coordination requirement on defining certain activities of daily living. The credit applies to taxable years beginning after December 31, 2026.

• Creates a $2,000 nonrefundable tax credit per qualifying older relative living with and cared for by the taxpayer (limit two relatives).
• Credit is available only to married taxpayers filing jointly.
• Credit phases down with income (phase-down rule in bill uses $75,000 and $150,000 thresholds; $150,000 applies for joint filers).
• Only one taxpayer may claim the credit for a given relative; the claim goes to the taxpayer with the higher AGI when multiple taxpayers qualify.
• Credit is reduced by any child and dependent care credit claimed for the same relative.
• Treasury must coordinate with HHS to define certain activities of daily living used to determine functional-ability eligibility.
• Special rule preserves eligibility for the year if a qualifying relative dies during the taxable year.
• Effective for taxable years beginning after December 31, 2026.
• The credit is nonrefundable and will lower federal tax revenue to the extent it is claimed.