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LANSING - Michigan lawmakers have proposed an income tax credit for family caregivers facing financial burdens from tending to loved ones.
AARP Michigan has been pushing the proposal that would give eligible caregivers a tax credit of up to 30% of their qualified expenses for family care services.
The organization "is supporting legislation which would provide a maximum $2,000 non-refundable tax credit to family caregivers with out-of-pocket costs while caring for a loved one," said Jason Lachowski, the associate state director of government affairs for AARP Michigan.
The legislation advanced out of the House Committee on Finance with unanimous support in June and is awaiting further action in the full House.
Qualifying expenses would include respite care, counseling or support services, transportation, assistive technology, direct-care assistance and durable medical equipment or home or vehicle modifications, according to Lachowski.
Michigan would not be the first state to establish a tax credit for family caregivers. Oklahoma and Nebraska have similar programs, while Connecticut approved a credit in 2026.
Those programs vary in the percent of expenses covered and the maximum amount caregivers can receive.
Family caregiving is not just about helping out, said Paula Cunningham, AARP Michigan's state director. Caregivers can arrange medical visits, oversee medicines, provide transportation and make adjustments to a home to make it easier for a family member to be independent.
Caregiving responsibilities can also affect employment.
A 2025 report from AARP and the National Alliance for Caregiving found that 18% of working caregivers had reduced their hours or moved from full-time to part-time work, while 56% had arrived late, left early or taken time off to provide care.
The legislation also outlines eligibility requirements for people receiving care. Depending on their age, they must require substantial assistance with daily activities or supervision because of severe cognitive impairment, among other criteria.
The National Alliance for Caregiving and AARP's 2025 Caregiving in the U.S.: Caring Across States report said over 1.5 million Michigan adults care for an older adult.
The report found that 53% of Michigan caregivers were employed while providing care. It also found that many experienced financial strain, including taking on debt, using personal savings and reducing their own savings.
"Family caregivers face significant financial hardships," Lachowski said.
Lachowski said 23% of the Michigan caregivers said they increased their debts, 21% used up their own short-term savings and 35% stopped saving money while caring for a loved one.
The report also said that one in three caregivers suffered from high emotional stress, while one in five had trouble seeing to their own well-being.
Lachowski said 24% of Michigan caregivers dedicate at least 40 hours per week to caring for someone else.
"Delivering financial relief through a tax credit helps relieve the financial and physical/mental challenges caregivers face, while ensuring high-quality care for their loved one," Lachowski said.
Jason Lachowski, associate state director of government affairs for AARP Michigan. (Photo courtesy of AARP)
Cunningham said AARP Michigan advocates for policies to keep older adults in their own homes and communities and spoke about the significance of home and community-based services.
"We want them to stay in our community and not go somewhere else," she said.
The tax credit legislation is sponsored by Rep. Kathy Schmaltz, R-Jackson. Co-sponsors included Reps. John Roth, R-Interlochen; Cam Cavitt, R-Cheboygan; and Nancy Jenkins-Arno, R-Clayton.
Though Lachowski said there has been bipartisan interest in helping family caregivers, the bill still faces difficulties over concerns about its impact on state revenues.
An analysis by the nonpartisan House Fiscal Agency estimated that the proposal, as originally introduced, would reduce state income tax revenue by approximately $80 million to $120 million annually. The agency noted that the estimate carries considerable uncertainty.
The proposal represents part of AARP Michigan's advocacy to value the contributions of family caregivers to older adults and people with disabilities. Lachowski said, "Caregivers are the invisible backbone of the long-term care system."
Lachowski said that according to the AARP 2026 Valuing the Invaluable study, family caregivers across the United States contribute about 49.5 billion hours of time every year, with an estimated value of $1.01 trillion.