A pair of lawmakers on the tax-writing House Ways and Means Committee have introduced bipartisan legislation to provide a tax credit for caregiving expenses.
[IMGCAP(1)]Rep. Linda Sánchez, D-Calif., who chairs the Congressional Hispanic Caucus, and Rep. Tom Reed, R-N.Y., introduced the Credit for Caring Act, which provides a tax credit to working family members equal to 30 percent of a caregiver’s expenses greater than $2,000. The bill aims to reward working taxpayers and encourage continued participation in the workforce while providing care to a loved one.
“This is more than just another tax credit,” Sánchez said in a statement Monday. “This is about how we can help older adults and people with disabilities live independently in their own homes and communities. This legislation will help alleviate some the burden on family caregivers by providing a tax credit for services such as home care and adult day care. I am proud to work with Rep. Tom Reed to find a bipartisan solution to help families across this country care for their loved ones.”
Caregivers would need to earn at least $7,500 of earned income (approximately halftime at minimum wage) to be eligible for the credit. The amount of the credit would be capped at $3,000 and phase out for married taxpayers with incomes over $150,000 ($75,000 for single or taxpayers filing separately).
To be eligible for the tax credit, taxpayers would need to be caring for a family member who is the taxpayer’s spouse, parent, grandparent, sibling, child, niece or nephew, brother or sister-in-law, or father or mother-in-law. The family member would need to be certified by a health care professional as requiring long-term care needs for at least six months and unable to perform at least two activities of daily living (dressing, eating, bathing, walking, going to the bathroom, and grooming/personal hygiene).
[IMGCAP(2)]Eligible expenses would include goods, services and support purchased by the caregiver to assist with activities of daily living. For example, the eligible expenses could include purchases made on behalf of the care recipient for groceries, incontinence supplies, a remote health monitoring device, modifications to a home, transportation to a doctor’s office, or hiring someone to look after an elderly parent.
“We care about those who become caregivers for their aging parents, grandparents or other relatives,” said Reed. “These families are making enormous sacrifices and oftentimes struggle to make ends meet. The expense of providing personal, at-home care can add up quickly. It’s only fair that we support our caregivers, and I’m proud to work with Rep. Linda Sanchez on legislation that does just that. It’s a win-win. Families will stay together and those in need of assistance have access to better care.”