To amend the Internal Revenue Code of 1986 to establish a credit for adult child caregivers.
- Sponsor
- Rep. Dingell, Debbie [D-MI-6]
- Committees
- Ways and Means Committee (primary)
- Last action
- Feb 20, 2026
Bottom line
This bill establishes a new federal tax credit to financially support adult children providing in-home care for elderly, dependent relatives, aiming to ease financial burdens and promote multigenerational living.
What it actually does
This bill amends the Internal Revenue Code of 1986 to create a new non-refundable tax credit of $2,000 for eligible individuals who provide care for a qualified relative. To qualify, the caregiver must be an adult U.S. citizen living with a relative aged 55 or older who requires substantial assistance with daily and instrumental activities of daily living, providing at least 10 hours of care per week. The credit is subject to income limitations and a maximum of two qualified relatives per taxpayer.
Proponents argue
Supporters argue this credit recognizes and alleviates the significant financial burden on family caregivers, promotes the benefits of multigenerational living, and helps keep older adults out of nursing homes, thereby improving their well-being and potentially reducing overall healthcare costs.
Opponents contend
Critics might contend that this tax credit could be costly to federal revenue, may not reach the most financially vulnerable caregivers due to its non-refundable nature and income phase-outs, and could incentivize informal care over professional services without adequate oversight of care quality.
The bill is concise and easily digestible, allowing for a quick understanding of its core provisions and implications.
Section 2(a), new Section 25F(a) of the IRC
Creation of $2,000 Tax Credit for Caregivers
This provision establishes a new non-refundable tax credit of $2,000 for eligible individuals who care for a qualified relative. The credit is allowed against the tax imposed by subtitle A of chapter 1 of the Internal Revenue Code, directly reducing the taxpayer's liability if they meet the specified criteria.
Supporters argue
Supporters contend this credit provides much-needed financial relief to family caregivers, acknowledging their vital role in supporting elderly relatives and reducing the strain on formal care systems by making in-home care more sustainable.
Critics contend
Opponents might argue that a $2,000 credit may be insufficient to meaningfully offset the substantial financial costs and time commitment of caregiving, potentially leading to limited real-world impact for many families.
Tradeoffs
This provision balances the desire to provide financial support and recognition to family caregivers with the fiscal implications of creating a new tax expenditure that reduces federal revenue.
Section 2(a), new Section 25F(b) of the IRC
Eligibility Criteria for Caregivers and Relatives
This section defines who qualifies for the credit. An 'eligible individual' must be an adult (18+, or 16+ and emancipated US citizen) who shares a principal abode with a 'qualified relative' for at least 6 months and provides at least 10 hours per week of required assistance. A 'qualified relative' must be age 55 or older, unable to perform at least one activity of daily living (ADL) and three instrumental activities of daily living (IADLs) requiring 10 hours/week of assistance, with this condition lasting at least 180 days. A licensed healthcare provider's attestation is required.
Section 2(a), new Section 25F(c) of the IRC
Income, Relative, and Filing Limitations
The credit amount is reduced by 1% for every $1,000 that a taxpayer's Adjusted Gross Income (AGI) exceeds $75,000 ($150,000 for joint filers). Only one taxpayer can claim a qualified relative, with the taxpayer having the highest AGI taking precedence if multiple are eligible. A maximum of two qualified relatives can be claimed per taxpayer. Married individuals must file a joint return to claim the credit. Additionally, the credit is reduced by any child and dependent care credit claimed for the same qualified relative.
The bill references '1 activity of daily living (as defined in section 7702B(c)(2)(B))' without explicitly stating what these activities are within the bill text itself.
Section 2(a), new Section 25F(b)(2)(A)(iii)(I)
Why it matters:This is standard legislative practice to avoid redundancy and maintain consistency with existing definitions in tax law, particularly those related to long-term care insurance contracts, simplifying implementation for the IRS and taxpayers familiar with these terms.
Case for: Using established definitions ensures consistency across different tax provisions and leverages existing legal interpretations, which can simplify compliance and reduce ambiguity for both the IRS and taxpayers.
Case against: For a casual reader, the cross-reference makes the bill less self-contained and requires additional research to fully grasp a key eligibility criterion, potentially creating a barrier to understanding the bill's full implications.
Estimated impact: This cross-reference clarifies a fundamental eligibility criterion for the 'qualified relative,' directly affecting who can be claimed for the credit based on their functional limitations.
This clause directs the Secretary of the Treasury to coordinate with the Secretary of Health and Human Services (HHS) when prescribing regulations or other guidance for 'instrumental activities of daily living' (IADLs) to ensure consistency with programs under chapter 7 of the Social Security Act.
Section 2(a), new Section 25F(b)(2)(C)(ii)
Why it matters:This is standard legislative practice for administrative guidance, ensuring inter-agency consistency in how definitions are applied across different federal programs without cluttering the main text with procedural details.
Case for: Ensures that the definition and application of IADLs for tax credit purposes align with established federal health and social programs, promoting a unified approach to assessing care needs and potentially simplifying compliance for healthcare providers.
Case against: Some might argue that tying tax definitions too closely to HHS programs could limit flexibility for the IRS to adapt to unique tax policy considerations or could inadvertently import complexities from other regulatory regimes.
Estimated impact: This directive influences how the IADL criteria will be interpreted and applied in practice, thereby affecting the scope of eligibility for the credit and potentially streamlining administrative processes for caregivers and healthcare providers.