S. 3295 creates a new tax credit of up to $2,000 per year for adult children who live with and provide care for aging relatives. To qualify, an adult must be at least 18 years old, share a home with a relative age 55 or older for at least six months of the year, and provide at least 10 hours per week of assistance to that relative who has significant functional limitations. The credit applies only to taxpayers earning $75,000 or less in adjusted gross income (or $150,000 for joint filers), with the credit reduced by one percent for each dollar earned above those thresholds. Taxpayers can claim the credit for up to two qualified relatives per year, and married couples must file jointly to receive it. The bill becomes effective for tax years beginning after December 31, 2026, and is designed to support multigenerational households where adult children provide care that might otherwise require paid nursing home or formal care services.
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