In May 2017, the Credit for Caring Act was introduced in the U.S. House and Senate. The purpose of the proposed bill is to amend the Internal Revenue Code of 1986 to provide a nonrefundable credit for working family caregivers. The bill (if passed) would increase the available tax credit for family caregivers up to $3,000 in a taxable year. This tax credit would provide eligible family caregivers caring for loved ones of all ages with some financial relief and help them pay for services such as in-home care, adult day care, respite care, and other support services. To help provide some context and background information, we’ve highlighted some key elements of the bill below.
What will the Credit for Caring Act Do?
The act would help save family caregivers money by offering a federal tax credit of up to $3,000. This bill would amend the IRS Code to allow an eligible caregiver a new tax credit for 30% of the cost of long-term care expenses that exceed $2,000, up to $3,000 in a taxable year. The bill defines “eligible caregiver” as an individual who has earned income for the taxable year in excess of $7,500 and pays or incurs expenses for providing care to a spouse or other dependent relative with long-term care needs.
Who Introduced the Bill?
Senators Joni Ernst (R-IA), Michael Bennet (D-CO), Shelley Moore Capito (R-WV), and Elizabeth Warren (D-MA), and Representatives Tom Reed (R-NY) and Linda Sánchez (D-CA) introduced the bill in the House and Senate respectively. A similar bill was proposed during the last congressional year but did not make it to a vote.
How Can I Track the Bill?
The title of the bill is the Credit for Caring Act. In the Senate the bill number is S. 1151 and H.R. 2505 in the House. You can check for status updates at Congress.gov.
Who Would be Eligible for the Tax Credit?
According to an AARP summary of the bill, family caregivers must meet the following criteria to receive the tax credit:
- Be a spouse, adult child, parent or another relation named under the “dependent” definition
- Help a loved one, of any age, who meets certain functional or cognitive limitations or other requirements, as certified by a licensed health care practitioner
- Have more than $7,500 in earned income for the taxable year
- Able to document qualified expenses
Family caregivers spend an average of $6,954 on out-of-pocket costs related to caregiving each year. These out-of-pocket costs are exactly why caregivers need as many tax breaks as possible. Pay close attention to H.R. 2505 and S.1151 – the Credit for Caring Act 2017 as it may benefit you directly. You can find additional tax benefits information available for caregivers here.