Senate bill offers tax credit for adults paying elderly care costs

What does this do?

S 4647 would create a federal tax credit covering up to 20 percent of out-of-pocket costs for caring for an elderly relative or household member, on a maximum of $6,000 in expenses per year, making the largest possible credit $1,200. Eligible expenses include medical care, adult day programs, home modifications, assistive devices, personal care, and caregiver counseling. The credit phases down as income rises above $120,000 and disappears entirely at higher income levels.

Who does it affect?

The credit is available to working-age adults who pay out of pocket to care for a parent, stepparent, in-law, grandparent, or other household member who is 65 or older and needs help with basic daily activities. It cannot be claimed for someone already listed as a dependent on the filer's taxes.

Why does it matter?

Family members who currently absorb elder care costs on their own would have a portion of those expenses offset through the tax system. The elderly individuals receiving care would not directly benefit from the credit, but the financial pressure on the people paying for that care could be reduced.

What does it cost, and who pays?

• Max expenses claimed: $6,000/year
• Credit rate: 20% of expenses
• Top credit value: $1,200