Credit for Caring Act of 2025

Bill Number: H.R. 2036
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Taxation
Status: Introduced
Latest Action: 2025-03-11: Referred to the House Committee on Ways and Means.
Last Updated: 2026-07-07T08:05:54Z

AI-Generated Summary

Purpose

The Credit for Caring Act of 2025 aims to provide financial relief to working family members who care for relatives with long-term care needs by offering a non-refundable tax credit for eligible caregiving expenses. This encourages caregivers to remain in the workforce while supporting family members who require assistance with daily living due to age, disability, or health conditions.

Key Provisions

Credit Amount: Eligible caregivers can claim a tax credit equal to 30% of qualified expenses that exceed $2,000 in a taxable year, with a maximum credit of $5,000. The maximum is adjusted annually for inflation starting in 2026, using a medical care cost index (rounded to the nearest $50).
Eligibility for Caregivers: An individual qualifies if they pay or incur qualified expenses for a care recipient and have earned income (wages or self-employment income) over $7,500 in the taxable year.
Qualified Care Recipients: These include a spouse or close relatives (e.g., child, parent, sibling, or dependent as defined under tax rules for qualifying relatives). The recipient must be certified by a licensed health care provider (such as a doctor) as having long-term care needs for at least 180 consecutive days, with part of that period in the tax year. Certification must occur within 39.5 months before the tax return due date.
Long-Term Care Needs Definition: Varies by age:
Ages 6+: Unable to perform at least 2 activities of daily living (ADLs, like bathing or dressing) without substantial help, or needs supervision due to severe cognitive impairment (e.g., dementia) affecting at least 1 ADL.
Ages 2-5: Unable to perform at least 2 of eating, transferring (moving from bed to chair), or mobility without substantial help.
Under 2: Requires durable medical equipment or a skilled practitioner due to a severe health condition when parents/guardians are absent.
Qualified Expenses: Cover goods, services, and supports that help with ADLs (basic self-care tasks) and instrumental ADLs (daily tasks like managing medications or housework). Examples include:
Human assistance (e.g., hiring a direct care worker), respite care (temporary relief for the caregiver), counseling or training, lost wages for unpaid time off (verified by employer), travel costs (using a standard medical mileage rate), assistive devices (e.g., remote monitoring tech), home modifications, transportation, and incontinence supplies.
Expenses must be solely for the care recipient and documented per IRS rules. They are reduced by amounts claimed under other tax benefits (e.g., child care credit, medical deductions, or exclusions for dependent care or health savings accounts). Contributions to ABLE accounts (savings for people with disabilities) do not qualify.
Income Phase-Out: The credit reduces by $100 for every $1,000 (or fraction) that modified adjusted gross income (AGI plus certain foreign income exclusions) exceeds $150,000 for joint filers or $75,000 for others. Thresholds adjust for inflation starting in 2026 using a cost-of-living index (rounded to the nearest $50).
Reporting Requirements: Taxpayers must include the care recipient's name and ID number, plus the certifying health provider's ID, on their tax return. No credit without proper documentation.

Significant Changes to Existing Law

This bill adds a new section (25F) to the Internal Revenue Code of 1986, creating a dedicated tax credit for family caregiving expenses. Previously, caregivers could only claim limited deductions or credits (e.g., medical expenses under section 213, which requires itemizing and exceeding 7.5% of AGI, or dependent care under section 21 for children under 13). This introduces a targeted, above-the-line credit (reducing tax before deductions) specifically for long-term care needs across all ages, including lost wages and respite care, which were not previously covered in this way. It applies to tax years starting after December 31, 2024.

Potential Impacts

On Citizens: Provides up to $5,000 in tax savings for middle-income working caregivers, potentially reducing financial strain and enabling more people to balance employment with family care. It may help families avoid institutional care (e.g., nursing homes) by supporting in-home options, benefiting an estimated 53 million U.S. family caregivers (per general demographic trends).
On Government Agencies: The IRS will need to develop guidance, forms, and verification processes for certifications and expenses, increasing administrative workload. Treasury may see reduced federal tax revenue (exact cost not specified in the bill but could be billions annually based on similar credits).
On International Relations: No direct impact, as this is a domestic tax policy focused on U.S. families.

Main Stakeholders Affected

Working Family Caregivers: Primary beneficiaries, especially those with moderate incomes caring for elderly parents, disabled children, or spouses.
Qualified Care Recipients: Individuals with disabilities, chronic illnesses, or age-related needs (e.g., seniors, young children with severe conditions), who gain indirect support through family care.
Health Care Providers: Doctors and practitioners who issue certifications, potentially facing increased demand for evaluations.
Employers: Involved in verifying lost wages; may see indirect benefits from reduced caregiver turnover.
Government Entities: IRS and Treasury for implementation and revenue effects; broader social services (e.g., Medicaid) could see reduced pressure if family care increases.

Notable Legal, Constitutional, or Political Implications

Legal: Introduces new compliance burdens, such as timely certifications and substantiation rules, which could lead to IRS audits or disputes over what qualifies as "long-term care needs" or "qualified expenses." The Secretary of the Treasury (in consultation with Health and Human Services) has authority to issue regulations, allowing flexibility but potential for future clarifications or challenges in tax court.
Constitutional: No apparent issues; it aligns with Congress's power to tax and spend under Article I, Section 8, and promotes general welfare by supporting families without discriminating by protected classes.
Political: Addresses growing societal needs amid an aging population and rising disability rates, potentially appealing to bipartisan support for family values and workforce participation. However, it adds to federal spending via tax expenditures, which could spark debates on fiscal responsibility or equity (e.g., phase-out favors middle-class over low-income families, who may not owe enough tax to benefit fully).

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Carey, Mike [R-OH-15]

Cosponsors (85)

Rep. Sánchez, Linda T. [D-CA-38], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Magaziner, Seth [D-RI-2], Rep. De La Cruz, Monica [R-TX-15], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Kiggans, Jennifer A. [R-VA-2], Rep. Ross, Deborah K. [D-NC-2], Rep. Van Drew, Jefferson [R-NJ-2], Rep. Panetta, Jimmy [D-CA-19], Rep. Lawler, Michael [R-NY-17], Rep. Morrison, Kelly [D-MN-3], Rep. Malliotakis, Nicole [R-NY-11], Rep. Torres, Ritchie [D-NY-15], Rep. Mann, Tracey [R-KS-1], Rep. Frost, Maxwell [D-FL-10], Rep. Kelly, Mike [R-PA-16], Rep. Budzinski, Nikki [D-IL-13], Rep. Cole, Tom [R-OK-4], Rep. Sherrill, Mikie [D-NJ-11], Rep. Tenney, Claudia [R-NY-24], Rep. Connolly, Gerald E. [D-VA-11], Rep. Valadao, David G. [R-CA-22], Rep. Neguse, Joe [D-CO-2], Rep. Allen, Rick W. [R-GA-12], Rep. Horsford, Steven [D-NV-4], Rep. Garbarino, Andrew R. [R-NY-2], Rep. Suozzi, Thomas R. [D-NY-3], Rep. Nunn, Zachary [R-IA-3], Rep. Harder, Josh [D-CA-9], Rep. Kelly, Robin L. [D-IL-2], Rep. Miller, Carol D. [R-WV-1], Rep. Baumgartner, Michael [R-WA-5], Rep. Bynum, Janelle [D-OR-5], Rep. Miller, Max L. [R-OH-7], Rep. Vindman, Eugene [D-VA-7], Rep. Graves, Sam [R-MO-6], Rep. Sewell, Terri A. [D-AL-7], Rep. Moore, Riley M. [R-WV-2], Rep. Boyle, Brendan F. [D-PA-2], Rep. Wilson, Joe [R-SC-2], Rep. DelBene, Suzan K. [D-WA-1], Rep. Bacon, Don [R-NE-2], Rep. Beatty, Joyce [D-OH-3], Rep. Moulton, Seth [D-MA-6], Rep. Schmidt, Derek [R-KS-2], Rep. Amodei, Mark E. [R-NV-2], Rep. Wasserman Schultz, Debbie [D-FL-25], Rep. Castor, Kathy [D-FL-14], Rep. Rutherford, John H. [R-FL-5], Rep. Wagner, Ann [R-MO-2] and 35 more