Caregiving Costs Mount As Michigan Lawmakers Revisit Tax Credit

(Source: MIRS.news, Published 03/26/2026) Family caregivers are quietly propping up the nation’s health care system to the tune of nearly $1 trillion a year, and Michigan lawmakers are looking to take another crack at easing the burden.

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A new report released Thursday by AARP found that roughly one in four Americans is caring for a loved one, often without pay, providing an estimated 49 billion hours of care annually. The value of work, ranging from basic daily assistance to complex medical tasks, now exceeds total Medicaid spending and nearly doubles out-of-pocket health care costs.

The findings underscore a growing policy push at both the state and federal level to offer financial relief and workplace flexibility for caregivers, an issue AARP leaders say is quickly becoming a bipartisan priority.

“Behind these numbers are people paying an emotional toll and a financial one,” AARP CEO Myechia Minter-Jordan said. “Caregivers are stretching their finances, sacrificing their own well-being, and too often, they are doing it alone.”

Caregivers spend an average of 27 hours per week assisting loved ones, with more than half providing high-intensity care, including complex medical tasks, according to AARP’s report. It added that many are balancing those responsibilities with jobs and family obligations, often at a financial cost.

That dynamic is playing out in Michigan, where about 1.6 million residents serve as caregivers. AARP Michigan State Director Paula Cunningham said many are leaving the workforce to care for family members, contributing to ongoing labor shortages.

Michigan lawmakers are weighing one potential solution. HB 5214, sponsored by Rep. Kathy Schmaltz (R-Jackson), would create a refundable tax credit equal to 30 percent of caregiving expenses, capped at $2,000. To qualify, caregivers must incur at least $2,000 in out-of-pocket costs and fall below income thresholds of $50,000 for individuals or $100,000 for joint filers. 

“On average, (caregivers in Michigan) spend more than $7,000 on different items connected to caregiving and that's a lot of money that they're spending,” Schmaltz told MIRS. “They lose time at work, they lose time with family members, and it can be a real burden on them, but they want to take care of their loved ones. So anything we can do to help them in this regard, with the tax credit, is really a good thing to do.”

The credit would cover expenses such as home modifications, medical equipment, respite care, transportation and in-home assistance. Nationally, AARP officials said at least a dozen states are weighing caregiver tax credits, alongside federal efforts to expand financial relief for families.

The proposal comes as Michigan faces one of the fastest-aging populations in the country and ranks near the bottom in funding for home-based care, according to Cunningham. It also follows a similar push from Gov. Gretchen WHITMER in 2024, when she called for a “Caring for MI Family Tax Credit” that would have provided up to $5,000 in relief for caregivers. It was ultimately not included in the final state budget as lawmakers negotiated spending priorities. 

Schmaltz's bill has gained bipartisan support with 18 Republican co-sponsors and four Democrat co-sponsors. She added that they are playing with the numbers to make sure everyone can agree that there is enough money in the budget, while still helping caregivers. 

“I don't think anyone is against helping our caregivers, and we're probably all going to be in that position anyway,” Schmaltz said. “I took care of my elderly parents too. It's just important that we have people who want to do this and who have the financial being and wellness to do this, and this is one way that we can help. We want to make sure that we're taking care of the people who are taking care of others.”

She expects the bill to be taken up in committee hearings after spring break and has spoken with the House Speaker's office on how to get it through the finish line.