What is the Credit for Caring Act of 2025

The Credit for Caring Act of 2025 is a bipartisan bill designed to offer meaningful financial relief to working family caregivers across the U.S. It was introduced in March 2025 in both the House and Senate, with broad support from lawmakers and organizations like AARP and the Alzheimer’s Association.

🎯 Purpose

The bill would create a new federal tax credit for people who provide long-term care to aging parents, spouses, or other loved ones—many of whom do so without pay and at great personal expense.

✅ Tax Credit Details

• Caregivers could receive a non-refundable tax credit of up to $5,000 per year.
• The credit would cover 30% of qualified caregiving expenses that exceed $2,000.
• The maximum credit amount would be adjusted for inflation after 2025.

👩⚕️ Who Qualifies?

To be eligible, a caregiver must:

• Earn at least $7,500 during the year.
• Provide care to a qualified care recipient, defined as:
  
  • A relative or family member,
  • Who is certified by a licensed healthcare provider as needing long-term care for at least 180 consecutive days.

📌 What Counts as a "Qualified Expense"?

Eligible expenses include:

• In-home care services or adult day care
• Respite care
• Training, counseling, or support for caregivers
• Home modifications to improve safety or accessibility
• Transportation for medical or care needs
• Lost wages due to time taken off work to provide care

💰 Income Limits

The credit phases out gradually at higher income levels:

• Starts phasing out at $75,000 for single filers
• At $150,000 for joint filers
• Reduced by $100 for every $1,000 over the threshold

📄 What You’d Need to Claim It

You would need to provide:

• Documentation of eligible expenses (receipts, invoices, etc.)
• The care recipient’s name and taxpayer ID
• A certification from a licensed healthcare provider confirming the need for long-term care

📅 When Would This Take Effect?

If passed, the credit would apply to tax years starting after December 31, 2024—so it would affect 2025 tax returns and beyond.

📊 Why This Matters

More than 48 million Americans are unpaid caregivers, often spending over $7,200 per year out-of-pocket. Many report having to reduce work hours or leave their jobs entirely to care for loved ones.

By helping cover some of those costs, the Credit for Caring Act aims to ease that burden—and help caregivers stay in the workforce. According to AARP, better support for older caregivers could boost U.S. GDP by up to $1.7 trillion by 2030.

🏛️ Where It Stands Now (as of July 2025)

• Introduced in both the House and Senate (as H.R. 2036 and S. 925)
• Referred to committees (House Ways & Means, Senate Finance)
• Still awaiting a vote or advancement

This is not the first time the bill has been introduced, but momentum is building, with strong bipartisan backing and public support.

✅ Summary at a Glance

Feature

Details

Max Credit: Up to $5,000/year

Credit Rate: 30% of expenses exceeding $2,000

Eligible Caregiver: Earned income ≥ $7,500

Care Recipient: Family member needing ≥180 days of long-term care

Qualified Expenses: Home care, respite, travel, training, lost wages, home updates

Phase-Out Starts: $75K (single), $150K (joint)

Effective Tax Year: Begins with 2025 returns

Documentation: Receipts + doctor certification required

Summary up to date as of: July 29, 2025

Source: Congress.gov

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