Could Financial Relief for Family Caregivers Finally Be on the Way?

AARP commends Congress for reintroducing the bipartisan Credit for Caring Act legislation

Kim Goad and Susan Milligan,

Updated March 11, 2025

AARP

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Published January 31, 2024

/ Updated March 11, 2025

two photos on the left are barbara and tom tarallo and on the right are diane zonko and her daughter caregiver barbara whisenhunt

Left: Barbara and Tom Tarallo; right: Diane Zonko with her daughter Elizabeth Whisenhunt

Courtesy Barbara Tarallo; Courtesy Elizabeth Whisenhunt

Caregivers often reach into their own wallets to make sure loved ones can hire home health aides for support, to pay for safety features like grab bars or for transportation to medical appointments.

According to AARP research, eight in 10 caregivers pay for routine expenses for loved ones, on average shelling out more than $7,000 a year in out-of-pocket expenses. But a piece of legislation could ease that challenge with a federal tax credit of up to $5,000 a year to help eligible working family caregivers defray the costs of caring for a spouse or other loved one with long-term needs.

AARP commends Congress for reintroducing the Credit for Caregiving Act on March 11, legislation that would offset some expenses, such as home care aides, adult day care, home modifications and respite care. The proposal has bipartisan support in both the House and Senate.

“America’s family caregivers put family first, helping their parents, spouses and others stay at home,” said Nancy LeaMond, AARP Executive Vice President and Chief Advocacy & Engagement Officer. “They spend thousands of dollars every year on this care, while juggling work and family responsibilities. We urge Congress to put money back into the pockets of hardworking family caregivers by passing the Credit for Caring tax credit.”

For Barbara Tarallo, 62, the Credit for Caring Act would have a real-world impact. In 2010, Tarallo’s husband, Tom, now 62, suffered a traumatic brain injury in a motor vehicle accident that left him in a wheelchair and unable to care for himself. Tarallo, a marketing and events manager for a software company, works from home in Pelham, New Hampshire, so she can more easily care for her husband. A part-time home health aide comes two hours a day, three days a week, but Tarallo often pauses her work to help the aide transfer Tom to his shower chair, and she had to purchase a sit-to-stand lift to keep him from falling.

The Credit for Caring Act, “if passed, would help toward the cost of caring for Tom,” says Tarallo, who spends $1,500 a month, on average, paying for Tom’s aide, adult briefs, medication and medical appointments, among other things. “This doesn’t include what I’ve had to pay for equipment to care for him or the cost of changes to our home to be able to care for him. The tax credits would help defray some of these costs.”

Tarallo says that if she were unemployed, her husband could qualify for Medicaid, which could cover some adult day care and other benefits. But Tarallo doesn’t know how they would get by without her income.

Paying for a loved one’s care

There are more than 48 million unpaid caregivers in the U.S., and they routinely cut back on their own health care or dip into their savings each year to help family members with heath issues. These caregivers spend an average of $7,200 annually on caring for loved ones, or $11,500 if they’re caring for a veteran, according to AARP research.

Caregivers provide $600 billion in care annually in unpaid work saving taxpayers billions of dollars by helping delay or prevent expensive nursing home care and hospital stays.

The Credit for Caring tax credit would be available to eligible working family caregivers of all ages, regardless of whether they live with their loved one or if that person is a dependent.

It’s a measure that could be particularly helpful to the 61 percent of family caregivers who work either full or part-time and often face the prospect of lost income, according to AARP’s 2023 Valuing the Invaluable report.

Many caregivers walk a tightrope between the demands of caregiving and paid work. A 2021 AARP survey found that a third of those polled reported two or more work-related strains, such as having to change work schedules to take leave. About half of caregivers polled said they have experienced financial setbacks forcing them to curtail spending or cut back on retirement contributions.

"The physical, emotional, and financial challenges they face in their caregiving roles cannot be overstated. Family caregivers are of all ages, races, and ethnicities and cut across all segments of our population. This is an ageless and nonpartisan issue,” AARP wrote in the letter to federal lawmakers.

State tax credits available

AARP has also been fighting to support caregivers at the state level, urging states to provide their own tax credits and other supports for caregivers.

Signed into law in 2023, the Oklahoma Caring for Caregivers tax credit was the nation’s first comprehensive caregiver tax credit, providing eligible caregivers with a state tax credit of up to $2,000 a year or up to $3,000 a year if the person being cared for is a veteran or has dementia. Nevada’s Caregiver Tax Credit Act, which went into effect this year, offers a similar tax credit for caregivers.

Other states have adopted more limited caregiver tax credits, like Georgia, Missouri and New Jersey, among others. And in Maryland, a new Caregiver Expense Grant Program launched this year providing reimbursement to caregivers for 30 percent of qualifying expenses exceeding $2,000, up to $2,500 per year.

“Increasingly, policymakers are recognizing the vital role that family caregivers play in our healthcare landscape — and the pressing need to give them more support through new laws and policies,” says Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. “Without their unpaid work, America’s system of long-term care would fall apart. Many family caregivers make financial sacrifices, spending thousands of dollars out of their own pockets to care for their loved ones.”

Elizabeth Whisenhunt, 66, built a lucrative career in the healthcare sector — as a clinical educator, nurse and pharmaceuticals rep — before retiring in 2022, a few years shy of her 65th birthday. The reason had nothing to do with her and everything to do with the needs of her mother, whose health was declining.

Over a couple of years, Whisenhunt’s mother, Diane Zonko, 89, faced a series of challenges. She was diagnosed with breast cancer and heart disease and lost her husband in 2016. Soon after, Zonko moved in with Whisenhunt in Owasso, Oklahoma, a suburb of Tulsa.

For many years, Whisenhunt was able to juggle working a full-time job and tending to her mother’s needs. Eventually, it became apparent that caring for Zonko would be all-encompassing. In 2022, Whisenhunt quit her job to be a stay-at-home caretaker.

Join Our Fight for Caregivers

Although she welcomed the opportunity to help her mother, it hasn’t been easy. Caregiving “is a full-time job with no pay,” she says. “I had to start taking out of my retirement to make ends meet.”

Whisenhunt spoke out in support of the Oklahoma tax credit legislation, and she’ll be watching closely as members of Congress reintroduce the Credit for Caring Act.

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Kimberly Goad is a New York-based journalist who has covered health for some of the nation’s top consumer publications. Her work has appeared in Women’s Health, Prevention, Health and Reader's Digest.

Susan Milligan is a contributing writer who has covered domestic policy, elections and foreign affairs for 40 years. She is a former foreign correspondent and White House correspondent for the Boston Globe. Her work has appeared in numerous magazines and newspapers, including the NewYork Daily News, AARP Bulletin, US News & World Report and PRINT magazine.