Nebraska Governor Signs Caregiver Tax Credit Bill

En español | Nebraska will soon offer eligible family caregivers a tax break for expenses incurred while caring for a loved one, thanks to new legislation championed by AARP.

The law, signed by Gov. Jim Pillen on April 23, would offer Nebraska family caregivers who meet income requirements a nonrefundable tax credit equal to half of their eligible caregiving expenses. The maximum credit is $2,000 a year or $3,000 per year for caregivers of a veteran or someone with dementia, starting in the 2025 tax year.

Nebraska is the second state in the country to pass an expansive tax credit that aims to ease the financial strain often experienced by family caregivers. A similar tax credit took effect in Oklahoma this year.

The bipartisan law’s passage is a major win for Nebraska’s 179,000 family caregivers, who collectively provide more than 168 million hours of unpaid care each year, valued at $2.8 billion. The average family caregiver in the U.S. spends roughly $7,200 a year on caregiving activities, such as modifying their home or hiring home care aides, according to AARP research.

“We’re excited to see the state of Nebraska recognize this critical need for family caregivers and take action to put into law one of the most comprehensive caregiver tax credits in the nation,” AARP Nebraska State Director Todd Stubbendieck said in a statement.

Nebraskans of any age would be eligible for the credit if they provide care for a family member living in a private residence and if their income is less than $50,000 for a single person, or $100,000 for a married couple. Eligible caregivers must assist with at least two activities of daily living, such as walking, dressing, feeding or bathing.

A range of expenses qualify, including costs related to home improvements for aging or a disability, the purchase of durable medical equipment or hiring a home care aide. Funding for the tax credit is capped at $1.5 million for the first two years but increases to $2.5 million in year three.

AARP has long pushed for laws and policies to ease the challenges faced by family caregivers. We continue to advocate for a federal tax credit of up to $5,000 to help cover caregivers’ out-of-pocket expenses.

Learn more about how AARP is fighting for family caregivers and keep up with our advocacy work in Nebraska.

Natalie Missakian covers federal and state policy and writes AARP's Fighting for You Every Day blog. She previously worked as a reporter for the New Haven Register and daily newspapers in Ohio. She has also written for the AARP Bulletin, the Hartford Business Journal and other publications.

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