Bipartisan Bill Seeks to Ease Financial Burden on Family Caregivers Through Tax Credit

Across the United States, millions of individuals dedicate their lives to caring for aging parents, spouses with disabilities, or other loved ones in need. This selfless act of service often comes at a significant financial cost, pushing families to their limits and forcing difficult choices. Recognizing the immense burden faced by these caregivers, a bipartisan group of lawmakers has reintroduced the Credit for Caring Act, a bill designed to provide much-needed financial relief in the form of a federal tax credit.

The proposed legislation aims to offer a nonrefundable federal tax credit of up to $5,000 to eligible working family caregivers. This credit would cover 30% of qualified expenses exceeding $2,000, providing crucial assistance for costs associated with home care aides, adult day care, respite care, transportation, home modifications, and other essential support services.

The Credit for Caring Act seeks to alleviate the financial strain experienced by millions like Ana Tris, a 66-year-old Miami resident who retired early from a successful corporate career to care for her 91-year-old mother with Alzheimer’s disease. Tris, along with her husband, relies on two hired caregivers to provide the necessary support, incurring out-of-pocket expenses of $80,000 in the past year alone.

Tris’s situation is far from unique. According to the AARP, an estimated 48 million Americans are engaged in family caregiving, contributing roughly $600 billion in unpaid labor annually. Alarmingly, sixty-one percent of these caregivers also hold part-time or full-time jobs, juggling the demands of their careers with the responsibilities of caring for a loved one. On average, caregivers in the U.S. spent $7,242 in out-of-pocket expenses in 2021, further highlighting the financial strain they face.

The Credit for Caring Act has garnered strong bipartisan support in both the Senate and the House of Representatives. Senators Shelley Moore Capito (R-W.Va.) and Michael Bennet (D-Colo.) are leading the charge in the Senate, while Representatives Mike Carey (R-Ohio) and Linda Sanchez (D-Calif.) are championing the bill in the House.

Several of the bill’s co-sponsors have firsthand experience as family caregivers, lending personal weight to their advocacy. Senator Capito, who served as chairman of the Senate Labor-HHS Appropriations Subcommittee, shared her experience caring for both of her parents as they battled Alzheimer’s. She emphasized that the Credit for Caring Act would help ease the financial burden on caregivers, allowing them to focus more on their loved ones and less on the associated costs.

Representative Sanchez, who also cared for both of her parents after they were diagnosed with Alzheimer’s, highlighted the emotional, physical, and financial challenges faced by family caregivers, particularly women who often juggle work, family responsibilities, and the demands of caregiving. She believes the Credit for Caring Act will provide much-needed financial relief through a tax credit for home care and adult day care.

Nancy LeaMond, chief advocacy and engagement officer for AARP, emphasized the significant toll caregiving takes on individuals’ work lives, leading to time off, missed promotions, and limitations on travel. She hopes the legislation will provide relief to hardworking individuals who are striving to care for their loved ones while maintaining their own livelihoods.

AARP has been advocating for similar legislation for a decade, and LeaMond believes that the current political climate is favorable for the bill’s passage. She noted that both presidential candidates during the last election recognized the importance of supporting family caregivers, and President Donald Trump expressed support for a tax credit to help them.

The Alzheimer’s Association has also joined the effort, working alongside AARP to push for the Credit for Caring Act. Robert Egge, chief public policy officer of the association, emphasized the urgent need to address the staggering costs faced by dementia caregivers. He noted that in 2023, Alzheimer’s caregivers provided 18.4 billion hours of unpaid care, valued at nearly $350 billion, demonstrating the immense contribution of these individuals.

A recent AARP poll of 4,000 voters revealed overwhelming support for a caregiver tax credit, with 84% of respondents in favor. The poll also found strong support across party lines, with Republicans (84%), Independents (82%), and Democrats (87%) all expressing their approval. Furthermore, 76% of voters agreed that Congress should prioritize supporting working Americans with a caregiver tax credit before extending any tax breaks for the wealthy and corporations.

The poll also highlighted the prevalence of family caregiving, with nearly two-thirds of voters (63%) having served as family caregivers at some point in their lives. Many of these caregivers are struggling financially, with 63% expressing concern about their personal financial situation.

The proposed Credit for Caring Act includes specific eligibility requirements. To qualify for the tax credit, individuals must be working caregivers with earned income of more than $7,500 a year. The credit phases out for caregivers at higher income levels, fully phasing out at $125,000 for individual filers and $200,000 for joint filers.

For Ana Tris, the possibility of a Caregiver Tax Credit offers a glimmer of hope. "I do feel like it’s a beginning," she said, emphasizing that "anything is helpful." While the bill faces the challenge of securing passage in Congress, the bipartisan support it has garnered, combined with the growing recognition of the immense contributions and financial burdens faced by family caregivers, suggests that the Credit for Caring Act has a real chance of becoming law and providing much-needed relief to millions of Americans.