AGE Act of 2026

Tax Credit for Eldercare Expenses: Section 2(a) introduces a new section 25G to the Internal Revenue Code, which allows individuals to claim an income tax credit for eldercare expenses paid for a qualifying individual. This could provide financial relief to families caring for older relatives.

Coverage of Diverse Care Services: Section 2(a) defines eldercare expenses under section 25G(b)(2) to include medical care, adult day services, personal care, respite care, assistive technologies, environmental modifications, and caregiver counseling or training. This allows individuals to receive support for a wide variety of practical care needs.

Support for Relatives and Household Members: Section 2(a) defines a qualifying individual under section 25G(b)(1) to include parents, grandparents, in-laws, stepparents, and any other person sharing the same principal place of abode as the taxpayer who has attained age 65 and requires assistance with activities of daily living. This ensures that a broad group of family members living together can be the basis for the credit.

Income-Based Reductions: Section 2(a) states under section 25G(a)(2) that the applicable percentage for the credit is reduced by 1 percentage point for each $4,000 that the taxpayer's adjusted gross income exceeds $120,000. This means taxpayers earning above $120,000 will receive a reduced tax credit or none at all.

Dollar Limits on Expenses: Section 2(a) limits the amount of eldercare expenses that can be taken into account to $6,000 per taxable year under section 25G(c)(1). Furthermore, this dollar limit is reduced by any amounts excluded from gross income under section 129 for the taxable year pursuant to section 25G(c)(2).

Restrictions on Payments to Related Individuals: Section 2(a) specifies under section 25G(d)(1) that no credit is allowed for any amount paid to an individual for whom a deduction under section 151(c) is allowable to the taxpayer or the taxpayer's spouse. This prevents taxpayers from claiming the credit for payments made to certain related individuals they claim as dependents.