Congress and States Advance Efforts to Provide Financial Support to Caregivers
As Health Policy News continues our Focus on Caregiving Series, we turn our focus to financial support for family caregivers. The Credit for Caring Act (H.R. 3321) aims to provide financial support to family caregivers and acknowledge the essential role they play in caring for loved ones with chronic illnesses or disabilities. First introduced in 2021 and reintroduced in February of 2024, this bill recognizes the vital contributions of family caregivers by seeking to provide a tax credit to alleviate some of the financial burdens they often face.
The main goal of the Act is to provide financial support to family caregivers who may have to take time off work or incur expenses to care for their loved ones. The tax credit could help offset some of these costs, making it easier for caregivers to continue providing the care their loved ones need without sacrificing their own financial well-being. Caregivers must provide long-term care for a spouse or dependent (“qualified care recipient”) to receive the tax credit.
The Credit for Caring Act gives caregivers up to $5,000 in non-refundable federal tax credits. Taxable caregivers must earn over $7,500 to qualify for the tax credit. These credits would cover up to 30% of qualified expenses over $2,000.
Some of the items that would be qualified for the tax credit are:
-
- Expenditures for respite care for a qualified care recipient.
- Expenditures for counseling, support groups, or training relating to caring for a qualified care recipient.
- Lost wages for unpaid time off due to caring for a qualified care recipient as verified by an employer.
- Travel costs of the eligible caregiver related to caring for a qualified care recipient.
- Expenditures for technologies, as determined by the Secretary of Health and Human Services, that assist an eligible caregiver in providing care for a qualified care recipient.
- Technologies can include assistive technologies and devices (including remote health monitoring) and environmental modifications to the home to assist transferring.
States In Action
Several states have also taken notice of the importance of supporting family caregivers and have introduced similar legislation. Oklahoma was one of the first states to pass an expansive and comprehensive tax credit for family caregivers with their Caregiving for Caregivers Act, which provides $2,000 in tax relief to family caregivers who incur out-of-pocket costs annually and $3,000 for those caring for a veteran or a person with dementia. Similarly, efforts are underway in states including Michigan, Nebraska, and Georgia to provide tax credits or other forms of financial assistance to family caregivers in their states.
-
- Caring for Michigan Family Tax Credit: During her 2024 State of the State address, the Governor Whitmer proposed a $5,000 caregiver tax credit for parents of children with long-term needs and senior citizens who want to remain in their homes but need costly in-home care.
- Nebraska Caregiver Tax Credit Act: First heard in January 2024, Nebraska’s LB937 seeks to provide eligible caregivers a state tax credit equal to 50% of eligible expenses for a maximum yearly credit of $2,000, or $3,000 if caring for a family member who is a veteran or has dementia. Taxable caregivers earning less than $50,000 annually and have personally incurred uncompensated expenses directly related to the care giving are eligible for this tax credit.
- Georgia Work and Family Caregiver Tax Credit Act: HB 79 aims to support the contributions of family caregivers by increasing the cap on tax credits for caregiving expenses from $150 to $1,000 and is expanding upon an existing tax credit.
These federal and state initiatives are a positive step towards recognizing and supporting the invaluable work that family caregivers do every day. By providing financial assistance to these dedicated individuals, states can help ensure that caregivers have the resources they need to continue providing high-quality care to their loved ones.