The AGE Act of 2026 establishes a federal income tax credit for individuals paying qualifying eldercare expenses for relatives aged 65 and older who need assistance with daily living.
Amy Klobuchar
Senator
MN
The AGE Act of 2026 establishes a federal income tax credit for individuals covering eligible eldercare expenses for qualifying relatives or household members aged 65 and older who need assistance with daily living. This credit is set at a base rate of 20% of expenses, subject to a phase-out based on higher adjusted gross income. The maximum covered expense amount is capped at $6,000 per tax year.
AGE Act Proposes $1,200 Annual Tax Credit for Family Caregivers Starting in 2026
If you’re currently balancing a career while helping an aging parent or grandparent manage their daily life, the AGE Act of 2026 is designed to put some cash back in your pocket. This bill creates a federal income tax credit specifically for eldercare expenses, covering up to $6,000 in costs per year. With a starting credit rate of 20%, that’s a potential $1,200 off your tax bill. To qualify, the person you’re caring for must be at least 65 years old and require help with basic activities of daily living. This isn't just for immediate family either; it extends to in-laws, step-parents, and even non-relatives who have lived in your home as a member of your household for the entire year.
More Than Just Doctor Bills
The bill defines "eldercare expenses" much more broadly than a typical medical deduction. Under Section 2, you can claim the credit for adult day services, respite care (which pays for a temporary caregiver so you can take a break), and even environmental modifications to your home—like installing a ramp or grab bars. It also covers assistive technologies and specific training for you, the caregiver. For example, if you’re a remote worker who just spent $2,000 on a specialized walk-in tub for your father-in-law and $1,000 on a week of respite care, those expenses would fall directly under this credit’s umbrella.
The Income Slide and Fine Print
While the credit starts at 20%, it’s designed to favor middle- and lower-income households. If your adjusted gross income (AGI) tops $120,000, that 20% rate begins to drop by one percentage point for every $4,000 you earn over that limit. There are also some strict "no double-dipping" rules: you can’t claim this credit for expenses you’ve already paid for using a tax-free Dependent Care Flexible Spending Account (FSA) from your job, nor can you claim it for someone you already list as a dependent for other tax breaks.
Keeping the Receipts
To actually get the credit, the IRS is going to need some paperwork. You’ll have to provide the name, address, and Taxpayer Identification Number (TIN) for every service provider you paid. If you’re using a professional care center, the bill specifies it must care for more than six people and follow all local laws to qualify. For the DIY caregiver, this means you’ll need to be diligent about tracking who you pay for personal care services throughout the year. The credit kicks in for the first tax year after the bill is signed into law, potentially offering a significant financial cushion for the millions of people currently providing unpaid care at home.