Like so many other family caregivers, you likely pay for items, care and services for your care recipient out of your own pocket. The expenses can stack up fast and often become a hardship for many family care providers. A bit of help may be coming your way if the Credit for Caring Act of 2017 is approved. This bill was presented in 2016 but did not go anywhere. It was recently re-introduced by a non-partisan group earlier this month, and if it goes well with Congress, you just may have some financial relief coming next tax season. Here are the details of what is proposed:
What is the Credit for Caring Act?
For eligible caregivers, it allows a non-refundable tax credit equal to 30% of qualified expenses spent to provide care to a family member. Qualified expenses are those that exceed $2,000 with a maximum $3,000 credit per tax year.
Who are Qualified Caregivers?
- Any employed person who incurs expenses while providing care to a qualified recipient (working family caregivers)
- Has earned income of $7,500 or more during the tax year
- The caregiver does not need to live in the same household as the care recipient
Who are Qualified Care Recipients
There is a wide variety of people who qualify to be a care recipient under this bill. Just about anyone who is related to the caregiver is covered, including:
- Step-brother or sister
- Niece or nephew
- In-law including son, daughter, father, mother, brother or sister
Care Recipient Requirements
- The care recipient must be certified by a licensed healthcare practitioner as having long-term care needs that last at least 180 days.
- The person in your care must require substantial help with activities such as bathing, dressing, toileting, feeding, transferring or walking due to a loss of functional capacity. Or they must need supervision due to severe cognitive impairment and is unable to perform at least one of the mentioned self-care tasks mentioned previously without reminding or cuing them. Also, if they need assistance in managing their finances, driving, shopping or meal preparation, medication management or housekeeping, they would also be considered a qualified care recipient.
What are the Qualified Expenses?
There is a wide variety of expenses that can go toward the tax credit. Some of these include :
- The hired help of a person to provide stand-by or hands on assistance
- Assistive technologies and remote health monitoring
- Home modifications
- Medication management systems
- Incontinence supplies
- Out-of-pocket costs for nursing home or residential care facilities
- Caregiver respite
- Counseling, support or training related to caregiving
- Lost wages of the family caregiver due to caregiving duties
- Travel cost of the caregiver to provide care, including mileage
What are the limitations?
Credit is phased out when income of the caregiver exceeds $150,000 for joint filers or $75,000 for individual filers.
Given that so much of the care for seniors falls onto family members like you, it makes sense that you should be given a break, at least on the financial side. You do so much to help keep your senior out of institutional care. The care you provide is likely worth much more than a $3,000 tax credit, but at least it’s a start; that is if it is enacted. I encourage you to call your Congressman and voice your support for the Credit for Caring Act.