By Leada Gore
New bipartisan legislation would put money in the hands of almost 50 million Americans who serve as caregivers for family members.
The Credit for Caring Act would reimburse family carers with up to $5,000 in non-refundable federal tax credits to cover up to 30% of qualified expenses that occur above $2,000. Non-refundable credits can reduce a taxpayer’s liability but once that hits zero, you don’t get any leftover amount back as a refund, according to the IRS.
The act was introduced late last month by Sens. Shelley Capito, R- West Virginia and Michael Bennet, D-Colorado, as well as Reps. Mike Carey, R-Ohio and Linda Sánchez, D-California. To be eligible, a caregiver is 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.
According to AARP, which worked with legislators on the bill, it would help offset a portion of the cost of caregiving expenses such as home health aides, adult day care, home modifications, assistive technology, respite care, transportation or other support that help caregivers and their loved ones.
“Family caregivers are the backbone of our country’s long-term care system, but they are overwhelmed, exhausted, and financially strained. Our caregivers desperately need support,” said Nancy A. LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer. “We urge Congress to pass this legislation in 2024 to help provide relief and put money back in the pockets of caregivers.”
The bill would not require the caregiver and the family member to live in the same house but the costs must be incurred by the caregiver seeking the tax credit, not expenses paid for by the loved one being cared for, USA Today reports.
AARP estimates more than 48 million Americans are caregivers, providing some $600 billion in unpaid care each year generally spending about $7,200 out of their own pockets annually. Sixty-one percent of family caregivers work either full or part-time, AARP said.
