A Refundable Family Caregiver Tax Credit for New York City

Family members caring for a relative with dementia, Parkinson's, or another neurodegenerative condition do work the city's own systems cannot deliver at scale, and they do it unpaid. This policy proposal recommends that the City Council support a state-level, refundable tax credit for those caregivers, designed so that sponsoring it adds no new line to the city's expense budget.

The problem

New York City has more than 1.2 million residents age 65 and older. Between fiscal years 2019 and 2024, that group grew 17 percent and the subset with a disability grew 26.2 percent. The city's main public response, home care through the Department for the Aging (DFTA), has not kept pace. Only $90.1 million of DFTA's roughly $618 million budget goes to case management and home care, the number of clients served has fallen about 20 percent since fiscal year 2019, and the average cost per client has risen from $8,957 to about $11,700.

Meanwhile, long-term care for an aging population is the largest driver of growth in the city's Medicaid claims. Family caregivers are already absorbing much of this gap for free.

The proposal

A refundable state tax credit of $37 per 20 hours of documented care, for family caregivers supporting a relative with a diagnosed cognitive or neurodegenerative condition. A full-time caregiver (18 to 21+ hours per week across at least three days) would receive about $2,500 per year. Because it is refundable, it reaches low-income caregivers who owe no state tax, the people most likely to be forced to choose between paid work and caregiving.

An income-tiered enhancement adds a 50 percent supplement (toward $3,750) for households below 200 percent of the federal poverty line, plus a one-time transitional credit for caregivers who document reduced work hours because of caregiving. Eligibility is re-reviewed every six months through physician re-certification.

Why it matters to the city's budget

Because the credit runs through the state tax system, the city's role is limited to verification support that DFTA and the Department of Health and Mental Hygiene already perform for other programs. Statewide, AARP estimates New York's 3.9 million family caregivers provide $58 billion of unpaid care a year. A population-weighted estimate for the city (my own illustrative figure, not an official one) suggests roughly 1.6 million unpaid caregivers. If 15 percent of them claimed the credit, about $615 million a year would flow into city households, funded by state and federal dollars.

Keeping it honest

The proposal layers verification so public funds pay only for care that is actually happening: a municipal caregiver registry, digital scan-in and scan-out logging, matching against physician-signed diagnoses, six-month re-certification, randomized in-home welfare checks, and cross-agency screening so the same hours can't also be billed by a paid home health agency.

Requested Council action

Sponsor or co-sponsor a resolution supporting the credit at the state level; ask the Independent Budget Office for a fiscal impact estimate; convene a roundtable with NYC Aging, the Alzheimer's Association, and caregivers from across the five boroughs; and consider a small local supplemental match as a lower-cost way for the city to act directly. The proposal also lays out pilot metrics, including enrollment by borough, change in the DFTA waitlist trend, and cost per delayed nursing home admission-month.