Learn more about CFSS in Minnesota
Americans are currently in the heart of tax season. Some individuals look forward to this time of year and have their taxes done before the ball drops on New Years Eve. Then there are the rest of us that drag out the process of filing our taxes for weeks or months. No matter which type of “tax filer” you are, Best Home Care is here to provide helpful guidance for personal care assistants, home care professionals, and family caregivers in the Twin Cities.
We here at Best Home Care recently came across a special tax exemption for home caregivers that meet certain criteria. After doing some research on this topic and speaking directly with the IRS, we discovered that seven of our home care employees qualified for this exemption. Thanks to this exemption, these home caregivers will be able to keep hundreds, if not thousands, of dollars this tax season.
This discovery is big news around our Minneapolis home care agency and we wanted to share it so other home care professionals could take advantage of it. In simple terms, a caregiver’s income is exempt from federal and state taxes if:
NOTE: People who care for recipients of PCA services who are not on a Medicaid waiver may still qualify for this exemption. According to the IRS, " Whether the Service will treat payments under a state program other than a state Medicaid Home and Community-Based Services waiver program as difficulty of care payments excludable from gross income will depend on the nature of the payments and the purpose and design of the program." Visit the IRS Website to learn more.
It’s important to note that this exemption is restricted to the income that the home caregiver receives for caring for the patient they live with.
This tax exemption was enacted as a way to assist individuals that would otherwise require care in a hospital, nursing facility, or intermediate care facility to receive care in the individual care provider’s home. In January of 2014, Notice 2014-7 was issued that stated the IRS would treat Medicaid waiver payments in these situations as difficulty of care payments excludable from gross income. For more information on this tax exemption for home caregivers, visit the IRS website. This exemption also applies to people not on a waiver. Click here to learn more about how this exemption applies to non-waiver home care services.
There is a good chance that you may qualify for this exemption if you provide senior home care or adolescent home care services for a family member. To learn more, contact the home care professionals at Best Home Care! We recently helped seven of our employees save on their taxes this season and we look forward to helping you next!
