Summary
Millions of family caregivers in the U.S. miss out on tax savings because they don't know what credits and deductions they qualify for. Important tax changes in 2025 and 2026 can help caregivers reduce their tax bills if they take the right steps.
Key Facts
- Over 63 million Americans provide unpaid care for family members, with many facing financial difficulties.
- Caregivers can claim the Credit for Other Dependents, receiving up to $500 per dependent if they meet specific criteria.
- The Child and Dependent Care Credit allows caregivers to claim a percentage of care expenses, up to $3,000 for one dependent or $6,000 for two or more.
- Caregivers can deduct medical expenses exceeding 7.5% of their adjusted gross income if they have proper documentation.
- In 2026, the Dependent Care Flexible Spending Account limit will increase to $7,500, allowing more pre-tax contributions for caregiving costs.
- Filing as Head of Household can offer higher standard deductions and lower tax rates for eligible caregivers.
- The Child Tax Credit will increase to $2,200 per child in 2025, providing additional tax relief for caregivers.
