Credit for Caring Act

Summary#

The Credit for Caring Act of 2025 adds a new federal tax credit for working family caregivers. The credit equals 30% of qualified care expenses that exceed $2,000 in a year, limited to $5,000 (with future inflation adjustments). To qualify, a taxpayer must be an "eligible caregiver" with more than $7,500 in earned income and must care for a "qualified care recipient" who is certified by a licensed health care practitioner as having long-term care needs for at least 180 consecutive days (with part of that period in the taxable year). The rule defines who counts as a qualified care recipient by relationship and by age-specific care needs. The credit is reduced for higher earners based on modified adjusted gross income, with phaseout thresholds of $150,000 for joint filers and $75,000 for others (indexed for inflation). Taxpayers must include the care recipient's name and taxpayer ID and the certifying practitioner's ID on their tax return. The changes apply to tax years beginning after December 31, 2024.

What it means for you#

• If you are a working family caregiver who pays eligible care costs and meets income and certification rules, you may get a tax credit worth 30% of qualifying expenses above $2,000, up to the credit limit.
• You must have more than $7,500 in earned income to claim the credit.
• The credit phases out for higher-income taxpayers above the stated thresholds.
• You must keep documentation and include the care recipient's and practitioner's identification numbers on your tax return.
• If you are not a caregiver, No publicly available information on effects for you.

Expenses#

Qualified expenses include payments for goods, services, and supports used only by the qualified care recipient to help with activities of daily living and instrumental activities of daily living. Examples listed in the bill include:

• human assistance (including direct care worker costs), supervision, cuing, and standby assistance;
• assistive technologies and devices (including remote health monitoring);
• home and environmental modifications;
• health maintenance tasks such as medication management;
• information and coordination of services;
• transportation for the care recipient;
• non-health items like incontinence supplies; and
• care costs in a home, residential setting, or nursing facility.

Additional items treated as qualified expenses if paid by the caregiver include respite care, counseling or support groups and training, employer‑verified lost wages for unpaid time off to provide care, travel costs related to care, and caregiver technologies as defined by the Secretary. The bill bars counting contributions to ABLE accounts as qualified expenses. Qualified expenses must be reduced by amounts already claimed under certain other tax provisions or excluded from income under specified sections. Taxpayers must substantiate expenses following IRS rules. The mileage rate for car travel may use the medical standard mileage rate.

Proponents' View#

Sponsors introduced the bill to provide a tax credit to help working family caregivers cover long-term care–related expenses. The text frames the measure as targeted tax relief for caregivers who meet the eligibility and certification requirements.

Opponents' View#

No publicly available information.