Credit for Caring Act of 2024
If enacted, the Credit for Caring Act will amend the Internal Revenue Code to create a financial incentive for individuals who provide care to family members with long-term needs. This significant alteration in tax law may alleviate some financial burden for caregivers, encouraging more families to support their loved ones at home rather than seeking institutional care. By recognizing the essential role of family caregivers, the act may also contribute to the overall reduction of costs in the long-term care system.
House Bill 7165, titled the 'Credit for Caring Act of 2024', is designed to offer financial support to working family caregivers by providing a tax credit for associated caregiving costs. The bill allows caregivers to claim up to 30% of qualified expenses exceeding $2,000 on their federal income tax, with a cap of $5,000. The bill also outlines specific criteria for 'qualified care recipients' who must meet certain long-term care needs in order to be eligible for the credit, thus targeting families who support loved ones with significant health challenges.
During discussions surrounding the bill, there were debates about the sufficiency and structure of the proposed tax credit. Some legislators questioned whether the credit amount was adequate to cover the diverse and sometimes unexpected costs associated with caregiving. Additionally, there were concerns about the income phase-out provisions for eligibility, which could limit access to those who might need the credit the most. This raises critical issues of equity and access within the context of caregiver support, as many individuals providing care are already facing financial strains.
The provisions under HB 7165 stipulate that the amendments apply to taxable years beginning after December 31, 2023. Hence, if the bill is passed, eligible caregivers will be able to claim the credit in their tax filings starting from the 2024 tax year. To comply with the new requirements, taxpayers will need to maintain documentation regarding qualified care expenses and ensure that care recipients meet the outlined eligibility criteria.