Credit for Caring Act of 2025

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.