New tax credit eases caregiving costs for working families—but access gaps remain
S. 925 — Credit for Caring Act of 2025 · Filed by Shelley Capito (R-WV) · 11 cosponsors · Introduced Mar 11, 2025 · Referred to committee
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What it does
This bill creates a new federal tax credit for working family caregivers. If you earn at least $7,500 and pay out-of-pocket expenses to care for a spouse or relative with long-term care needs (certified by a health professional), you can claim a credit worth 30% of qualifying expenses above $2,000, up to a maximum of $5,000 per year. The credit phases out for higher earners (starting at $150,000 for joint filers) and covers costs like in-home care, medical equipment, respite care, counseling, lost wages from unpaid time off, and travel related to caregiving.
Why we flagged it
The bill's core function is straightforward: it creates a new refundable tax credit specifically designed to offset out-of-pocket caregiving expenses for working families. This is a direct fiscal benefit to individuals, not a regulatory change or industry carve-out.
What the text implies
- The credit may incentivize informal caregiving arrangements over formal long-term care insurance, potentially reducing demand for private LTC insurance products and affecting the insurance sector's revenue model.
- Certification requirement by a licensed health care practitioner creates a gatekeeping mechanism; individuals without access to such practitioners or in underserved areas may face barriers to claiming the credit.
The full analysis lists 5 implications of this text.
Who stands to gain
working families with caregiving expenses; long-term care service providers (home care agencies, medical equipment suppliers); health care practitioners (certification revenue)