On March 11, a group of bipartisan, bicameral legislators, led Rep. Mike Carey (R-OH), Rep. Linda Sanchez (D-CA), Sen. Shelley Moore Capito (R-W.VA.) and Sen. Michael Bennett (D-CO) reintroduced the Credit for Caring Act, which would provide a federal, nonrefundable tax credit of up to $5,000 for working family caregivers. Caregivers with an earned income of at least $7,500 annually would be eligible for the credit if their care recipient meets certain functional or cognitive limitations. The credit would phase out for individual filers earning more than $75,000 in a taxable year and $150,000 for joint filers.
NAIFA submitted a letter supporting the legislation, arguing that it would provide much-needed financial support for family caregivers to offset the often-high out-of-pocket costs they incur each year. The credit can help facilitate proactive financial planning and help alleviate the burden that caregivers face. In conjunction with other long-term care efforts and reforms, such as wider adoption of long-term care insurance, a federal caregiver tax credit can help address the broader long-term care crisis facing the U.S.
Prospects: Previous iterations of the legislation have not seen much success. However, as the population continues aging rapidly, leaving more people responsible for caregiving responsibilities, the legislation could possibly receive more attention. There is no indication lawmakers are considering such a credit in their discussions on the reconciliation bill, so any movement may have to wait until next year at the earliest.
NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org; or Roger Moore – Policy Director – Government Relations, at rmoore@naifa.org.