The Credit for Caring Act of 2025 creates a new federal tax credit to help working people who provide care for family members or others with long-term care needs. Eligible caregivers can claim a credit equal to 30 percent of qualified caregiving expenses exceeding $2,000 per year, with a maximum credit of $5,000 annually. To qualify, a person must have earned income over $7,500 and be caring for someone certified by a licensed healthcare provider as having long-term care needs for at least 180 consecutive days—including children as young as infants with severe health conditions, older relatives, or spouses with disabilities or cognitive impairment. Qualified expenses cover a broad range of caregiving costs, including in-home assistance, medical equipment, home modifications, respite care, lost wages from unpaid leave, travel, and caregiver support services. The credit phases out for higher earners, beginning at modified adjusted gross income of $150,000 for married couples and $75,000 for others, and the income thresholds will adjust annually for inflation starting in 2026. The legislation takes effect for tax years beginning after December 31, 2024.
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