Credit for Caring Act of 2025

The Credit for Caring Act of 2025 aims to provide financial relief to millions of Americans who provide unpaid care for aging parents, spouses, or other loved ones with long-term needs. The bill proposes a new, nonrefundable federal tax credit of up to $5,000 for eligible working family caregivers. To qualify, a caregiver must have an earned income of at least $7,500 and be caring for a person with certified functional or cognitive limitations. Unlike some existing tax credits, this proposal would apply even if the care recipient is not a legal dependent or does not live in the same household as the caregiver.

Under the proposed legislation, the credit would cover 30% of qualified caregiving expenses that exceed $2,000 in a year. These expenses could include costs for home care aides, adult day care, respite care, home modifications for accessibility, and specialized transportation. The bill is designed to help offset the significant personal costs often incurred by family members, which can average over $7,000 annually. To ensure the benefit is targeted toward those with the most need, the credit would be subject to income limits, with higher-earning individuals receiving a reduced credit or becoming ineligible entirely.