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New Caregiver Tax Credit Supports Family Caregivers in Connecticut
During the 2026 legislative session, AARP Connecticut advocated for a Connecticut Caregiver Tax Credit to help offset qualified expenses incurred by family caregivers, who on average spend $7,200 annually out of pocket. AARP Connecticut applauds lawmakers for standing with family caregivers and passing the legislation that will begin in 2027.
According to AARP’s Valuing the Invaluable report, family caregivers in Connecticut provide 460 million hours of care each year — work that would be worth $10.7 billion annually if paid at the market rate of $23.45 per hour. This care saves taxpayers billions of dollars and serves as the backbone of the long-term care system, helping millions of older adults remain independent in their homes.
Without the 773,000 family caregivers in Connecticut, many more residents would be forced into expensive institutional care, driving significantly higher costs for taxpayers and public programs.
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Connecticut’s Caregiver Tax Credit
The economic value caregivers provide often comes at a personal cost to their health and financial security. Many are juggling jobs, family responsibilities, and thousands of dollars in out-of-pocket expenses to care for their loved one.
Support is finally on the way for eligible family caregivers and the parents, spouses, and other loved ones they care for thanks to the new Connecticut Caregiver Tax Credit passed during Connecticut’s 2026 legislative session. The new tax credit will take effect on January 1, 2027, and be available to eligible caregivers for the 2027 tax year.
About the Tax Credit
The Connecticut Caregiver Tax Credit provides a nonrefundable tax credit for out-of-pocket costs incurred by the family caregiver for a limited set of eligible costs. The expenses must be directly related to helping the family caregiver care for an eligible family member. The available tax credit is equal to 50% of eligible expenses up to a maximum of $2,000 per year for eligible caregivers. There are no age restrictions to qualify for the tax credit.
Qualifications to Receive the Tax Credit
- Eligible Connecticut residents receiving care from a family caregiver must require assistance with at least two activities of daily living (ADLs) such as walking, feeding, dressing, personal hygiene, and toileting. The ADLs must be certified by a licensed health care provider.
- Family caregivers – or those providing care and support for an eligible family member – must have a federally adjusted gross income of less than $50,000 (individual) or less than $100,000 (married couple filing jointly) to receive the tax credit. They must also personally incur uncompensated expenses directly related to the care of an eligible family member.
- Care recipients must be a dependent, spouse, parent, or other relation by blood or marriage to the family caregiver.
- Individuals must live in a private residential home — not an assisted living center, nursing facility, or residential care home.
Eligible Expenditures
Credit-eligible expenditures include the following:
- Improvements or alterations made to the caregiver’s or eligible family member’s primary residence to allow the family member to live there and stay mobile, safe, and independent.
- Purchased or leased equipment, including durable medical equipment, needed to help the eligible family member do one or more daily living activities.
- Other expenses the caregiver paid or incurred that help provide care to an eligible recipient, such as hiring a home health aide, respite care, adult day care, personal care attendants, and health care equipment and technology. They exclude general household maintenance activities, such as painting, plumbing, electrical repairs, and exterior maintenance.
How to Apply for the Tax Credit
Beginning with the 2027 tax year, family caregivers must apply for the tax credit with the Connecticut Department of Revenue Services (DRS), which will administer a system of tax credit vouchers. DRS will notify applicants in writing not later than thirty days after receiving an application to let the applicant know if their application has been approved or rejected. DRS will process applications in the order received, and the total amount of the tax credits issued in any year may not exceed $1.8 million. Information about how to apply with the DRS for the tax credit will be available in 2027.
Caregiving Resources
AARP also helps families navigate caregiving challenges by connecting them to trusted resources. AARP Connecticut’s resource guide helps family caregivers access key programs, services and agencies right in their community. In addition, through its partnership with United Way Worldwide, caregivers can access local support services in Connecticut, as well as 27 other states, by calling 211, including help finding in-home care, respite care, transportation, and other essential services. To find out more, visit www.aarp.org/caregiving.
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