Credit for Caring Act of 2025

New caregiver tax credit for families

If enacted, the bill would create a nonrefundable tax credit for family caregivers. The credit would equal 30% of qualified care expenses above $2,000 in a year. It would be capped at $5,000 per year before future inflation adjustments. You would need more than $7,500 in earned income to claim it. The credit would phase out as your modified AGI rises. It would be reduced $100 for each $1,000 (or fraction) over the threshold: $150,000 joint, $75,000 other. To qualify, the care recipient must be your spouse or certain relatives and have long-term care needs. A licensed practitioner must certify at least 180 consecutive days, with part of that period in the tax year. You must include the care recipient's name and taxpayer ID and the practitioner's ID on your return. Qualified expenses would include home help, direct care worker pay, and respite. They would also include counseling, employer-verified lost wages, travel, home changes, and assistive technology. ABLE account contributions would not qualify. Expenses must be reduced by amounts used for certain other tax benefits and must be substantiated under IRS rules. The $5,000 cap and the income thresholds would be indexed after 2025 and rounded down to the nearest $50. If enacted, these rules would apply to tax years starting after December 31, 2024.