H.R. 5881 creates a new tax credit for working families who provide care for dependents or relatives with long-term care needs. Eligible caregivers can claim a credit equal to 30 percent of qualified caregiving expenses that exceed $2,000 per year, up to a maximum credit of $10,000 (adjusted annually for inflation after 2026). To qualify, taxpayers must have earned income over $7,500 annually and care for a dependent child or family member with documented long-term care needs lasting at least 180 consecutive days. Qualified expenses include direct care costs, home modifications, assistive technology, respite care, caregiver training, lost wages from unpaid leave, and travel—though expenses already claimed under other tax benefits cannot be double-counted. The credit phases out for higher-income families, reducing by $100 for every $1,000 in income above $150,000 (for joint filers) or $75,000 (for others), and becomes effective for tax years beginning after December 31, 2025.
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