Credit for Caring Act of 2025

New tax credit for caregivers

You would be able to claim a nonrefundable tax credit equal to 30% of qualified care expenses that exceed $2,000 in a year. The credit would be capped at $5,000 per year initially, with the cap indexed after 2025 using a medical care cost adjustment and rounded down to the nearest $50. To claim the credit you would need earned income over $7,500 and a qualified care recipient (your spouse or certain relatives) certified by a licensed practitioner as needing long‑term care for at least 180 consecutive days, with part of that period in the tax year. The credit would be phased out by $100 for each $1,000 (or fraction) your modified adjusted gross income is above $150,000 if married filing jointly or $75,000 for other filers; those thresholds are indexed after 2025. Qualified expenses would include many caregiver costs (in‑home aides, assistive devices, home modifications, respite, counseling, certain lost wages and travel, and more) but would exclude ABLE contributions and would be reduced by amounts already used under specific other tax rules. You would have to list the care recipient’s name and TIN and the certifying practitioner’s ID on your return and keep required substantiation. The rule would apply to taxable years beginning after December 31, 2024.