Credit for Caring Act of 2025
Congress Proposes New $5,000 Tax Credit to Help Working Families Pay for Caregiving Costs
Stalled
No legislative action in over 90 days.
Legislative Progress
Key Points
- This bill would create a new federal tax credit to help people who work while also caring for a family member. If you spend more than $2,000 a year on caregiving expenses, you could get back 30% of those costs as a credit on your taxes, up to a maximum of $5,000 each year.
- To qualify, the person you are caring for must be a relative, such as a spouse or parent, and a doctor must certify they have long-term health needs lasting at least six months. The caregiver must also earn at least $7,500 a year from a job to be eligible for the credit.
- The credit covers many common costs, including home modifications like ramps, assistive technology, transportation, and even lost wages if you have to take unpaid time off work. It also covers 'respite care,' which pays for a professional to step in so the family caregiver can take a break.
- The benefit is designed for middle-class families. The credit starts to decrease for single people making over $75,000 a year or married couples making over $150,000. These income limits and the $5,000 maximum credit will be adjusted for inflation in the future to keep up with rising costs.
- If passed, this new rule would apply to the taxes people file for the year 2025 and beyond. It aims to reduce the financial pressure on the millions of Americans who balance a career with the daily demands of looking after an aging or disabled loved one.
Impact Analysis
Personal Impact
Programs
The bill creates a separate, new tax credit that exists alongside the child tax credit. Families caring for children under age 6 with severe health conditions or functional limitations could potentially claim both credits, though the caregiving credit specifically requires medical certification of long-term care needs. The two credits serve different purposes and don't directly interact.
Disabilities
Milestones
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
3 articlesCaregiver Tax Credit Could Pass in 2025 With Trump, GOP Support
Advocates are optimistic that the Credit for Caring Act may finally pass in 2025 due to bipartisan support and President Trump's campaign endorsements. The Joint Committee on Taxation previously estimated a similar credit would cost approximately $28 billion over five years.
Idaho Woman Can Barely Afford Care for Her 83-Year-Old Mother With Dementia, and Medicare's 2026 Changes Could Push Caregivers Like Her to the Brink
As Medicare premiums and deductibles are set to rise in 2026, the Credit for Caring Act is highlighted as a critical legislative solution. The bill would offer a $5,000 credit to help offset the average $7,200 in out-of-pocket costs caregivers face annually.
Carey, Sánchez, Capito, Bennet Reintroduce the Credit for Caring Act
Bipartisan lawmakers reintroduced the Credit for Caring Act to provide a nonrefundable tax credit of up to $5,000 for working family caregivers. The bill covers 30% of qualified expenses over $2,000, including home modifications, respite care, and transportation.
Source Information
Document Type
Congressional Bill
Official Title
Credit for Caring Act of 2025
Data Sources
Sponsor
Cosponsors
(81)Analysis generated by AI. Always verify with official sources.